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Adaption or social comparison? The effects of income on happiness

Listed author(s):
  • Luis Angeles

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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File URL: http://www.gla.ac.uk/media/media_110443_en.pdf
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Paper provided by Business School - Economics, University of Glasgow in its series Working Papers with number 2009_09.

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Date of creation: Nov 2008
Date of revision: Jun 2009
Handle: RePEc:gla:glaewp:2009_09
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