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Happiness Dynamics with Quarterly Life Event Data

Author

Listed:
  • Frijters, Paul

    () (London School of Economics)

  • Johnston, David W.

    () (Monash University)

  • Shields, Michael A.

    () (Monash University)

Abstract

This paper addresses the question of when and to what extent individuals are affected by major positive and negative life events, including changes in financial situation, marital status, death of child or spouse and being a victim of crime. The key advantage of our data is that we are able to identify these events on a quarterly basis rather than on the yearly basis used by previous studies. We find evidence that life events are not randomly distributed, that individuals to a large extent anticipate major events and that they quickly adapt. These effects have important implications for the calculation of monetary values needed to compensate individuals for life events such as crime or death of spouse. We find that our new valuation methodology that incorporates these dynamic factors produces considerably smaller compensation valuations than those calculated using the standard approach.

Suggested Citation

  • Frijters, Paul & Johnston, David W. & Shields, Michael A., 2008. "Happiness Dynamics with Quarterly Life Event Data," IZA Discussion Papers 3604, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3604
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    Citations

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    Cited by:

    1. Nattavudh Powdthavee, 2012. "Jobless, Friendless and Broke: What Happens to Different Areas of Life Before and After Unemployment?," Economica, London School of Economics and Political Science, vol. 79(315), pages 557-575, July.
    2. Francesca Cornaglia & Naomi E. Feldman & Andrew Leigh, 2014. "Crime and Mental Well-Being," Journal of Human Resources, University of Wisconsin Press, vol. 49(1), pages 110-140.
    3. Baetschmann, Gregori & Staub, Kevin E. & Studer, Raphael, 2016. "Does the stork deliver happiness? Parenthood and life satisfaction," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 242-260.
    4. Tineke DeJonge & Ruut Veenhoven & Wim Kalmijn & Lidia Arends, 2016. "Pooling Time Series Based on Slightly Different Questions About the Same Topic Forty Years of Survey Research on Happiness and Life Satisfaction in The Netherlands," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(2), pages 863-891, March.
    5. Powdthavee, Nattavudh, 2009. "What happens to people before and after disability? Focusing effects, lead effects, and adaptation in different areas of life," Social Science & Medicine, Elsevier, vol. 69(12), pages 1834-1844, December.
    6. Paul Downward & Simona Rasciute, 2011. "An Economic Analysis of the Subjective Health and Well-being of Physical Activity," Chapters,in: The Economics of Sport, Health and Happiness, chapter 2 Edward Elgar Publishing.
    7. Robert Rudolf & Sung-Jin Kang, 2015. "Lags and Leads in Life Satisfaction in Korea: When Gender Matters," Feminist Economics, Taylor & Francis Journals, vol. 21(1), pages 136-163, January.
    8. Fischer, Justina AV, 2009. "Happiness and age cycles – return to start…," MPRA Paper 15249, University Library of Munich, Germany.
    9. Olga Shemyakina & Anke Plagnol, 2013. "Subjective Well-Being and Armed Conflict: Evidence from Bosnia-Herzegovina," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 113(3), pages 1129-1152, September.
    10. Fischer, Justina AV, 2010. "Accounting for Unobserved Country Heterogeneity in Happiness Research: Country Fixed Effects versus Region Fixed Effects," MPRA Paper 22272, University Library of Munich, Germany.
    11. Plagnol, Anke C., 2011. "Financial satisfaction over the life course: The influence of assets and liabilities," Journal of Economic Psychology, Elsevier, vol. 32(1), pages 45-64, February.
    12. Frijters, Paul & Johnston, David W. & Shields, Michael A., 2011. "Destined for (Un)Happiness: Does Childhood Predict Adult Life Satisfaction?," IZA Discussion Papers 5819, Institute for the Study of Labor (IZA).
    13. Tineke DeJonge & Wim Kalmijn & Ruut Veenhoven & Lidia Arends, 2015. "Stability of Boundaries Between Response Options of Response Scales: Does ‘Very Happy’ Remain Equally Happy over the Years?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 123(1), pages 241-266, August.
    14. Arthur Grimes & Judd Ormsby & Kate Preston, 2017. "Wages, Wellbeing and Location: Slaving Away in Sydney or Cruising on the Gold Coast," Working Papers 17_07, Motu Economic and Public Policy Research.
    15. repec:pal:easeco:v:43:y:2017:i:4:d:10.1057_eej.2015.46 is not listed on IDEAS
    16. Kate Preston & Arthur Grimes, 2017. "Migration and Gender: Who Gains and in Which Ways?," Working Papers 17_08, Motu Economic and Public Policy Research.

    More about this item

    Keywords

    adaptation; life events; life satisfaction; compensation;

    JEL classification:

    • I0 - Health, Education, and Welfare - - General

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