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Adaption or social comparison? The effects of income on happiness

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  • Luis Angeles

Abstract

Two mechanisms have attracted considerable attention from researchers studying the effects of income on happiness: adaptation and social comparison. In most empirical studies these two mechanisms have been considered separately. This paper contributes to the literature by jointly testing for the presence of adaptation and social comparison using UK data. Our results show that the data supports both adaptation and social comparison when we test them separately, but that only adaptation survives when we test them jointly. The result has important consequences for public policy and for our understanding of human motivation.

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  • Luis Angeles, 2008. "Adaption or social comparison? The effects of income on happiness," Working Papers 2009_09, Business School - Economics, University of Glasgow, revised Jun 2009.
    • Handle: RePEc:gla:glaewp:2009_09
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    Cited by:

    1. Luis Angeles, 2009. "Adaption and anticipation effects to life events in the United Kingdom," Working Papers 2009_08, Business School - Economics, University of Glasgow.
    2. Adalgiso Amendola & Roberto Dell’Anno & Lavinia Parisi, 2019. "Happiness and inequality in European countries: is it a matter of peer group comparisons?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(2), pages 473-508, July.
    3. Ehsan Latif, 2015. "Happiness Adaptation to Income: Evidence from Canada," Economics Bulletin, AccessEcon, vol. 35(3), pages 1477-1487.

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