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Happiness, Dynamics and Adaptation

  • Piper, Alan T.

This investigation employs dynamic panel analysis to provide new insights into the phenomenon of adaptation. Using the British Household Panel Survey, it is demonstrated that happiness is largely (but not wholly) contemporaneous. This can help provide explanations for previous findings, where many events entered into in the past are often adapted to (like marriage and divorce), and others are not adapted to (like unemployment and poverty). An event – no matter when entered into - must have a contemporaneous impact on either the life of an individual or an individual’s perception of their life (or both) for it to be reflected in self-reported life satisfaction scores. This contemporaneous finding also explains other results in the literature about the well-being legacy of events.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 52342.

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Date of creation: Dec 2013
Date of revision:
Handle: RePEc:pra:mprapa:52342
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  1. Stutzer, Alois & Frey, Bruno S., 2005. "Does Marriage Make People Happy, Or Do Happy People Get Married?," IZA Discussion Papers 1811, Institute for the Study of Labor (IZA).
  2. Piper, Alan, 2013. "A Note on Modelling Dynamics in Happiness Estimations," MPRA Paper 49364, University Library of Munich, Germany.
  3. Wunder, Christoph, 2012. "Does subjective well-being dynamically adjust to circumstances?," Economics Letters, Elsevier, vol. 117(3), pages 750-752.
  4. Piper, Alan T., 2012. "Dynamic Analysis and the Economics of Happiness: Rationale, Results and Rules," MPRA Paper 43248, University Library of Munich, Germany, revised Dec 2012.
  5. N Powdthavee, 2008. "I Can’t Smile Without You: Spousal Correlation in Life Satisfaction," Discussion Papers 08/16, Department of Economics, University of York.
  6. Andrew E. Clark & Conchita D’Ambrosio & Simone Ghislandi, 2013. "Poverty and Well-Being: Panel Evidence from Germany," Working Papers 291, ECINEQ, Society for the Study of Economic Inequality.
  7. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November.
  8. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative income, happiness, and utility: An explanation for the Easterlin paradox and other puzzles," Post-Print halshs-00754299, HAL.
  9. Godfrey,L. G., 1991. "Misspecification Tests in Econometrics," Cambridge Books, Cambridge University Press, number 9780521424592.
  10. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," United Kingdom Stata Users' Group Meetings 2003 02, Stata Users Group.
  11. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  12. Bottan, Nicolas Luis & Perez Truglia, Ricardo, 2011. "Deconstructing the hedonic treadmill: Is happiness autoregressive?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(3), pages 224-236, May.
  13. George MacKerron, 2012. "Happiness Economics From 35 000 Feet," Journal of Economic Surveys, Wiley Blackwell, vol. 26(4), pages 705-735, 09.
  14. Oswald, Andrew J. & Powdthavee, Nattavudh, 2006. "Does Happiness Adapt? A Longitudinal Study of Disability with Implications for Economists and Judges," IZA Discussion Papers 2208, Institute for the Study of Labor (IZA).
  15. Gardner, Jonathan & Oswald, Andrew J., 2005. "Do Divorcing Couples Become Happier By Breaking Up?," IZA Discussion Papers 1788, Institute for the Study of Labor (IZA).
  16. Kavetsos, Georgios & Szymanski, Stefan, 2010. "National well-being and international sports events," Journal of Economic Psychology, Elsevier, vol. 31(2), pages 158-171, April.
  17. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
  18. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
  19. David M. Drukker, 2003. "Testing for serial correlation in linear panel-data models," Stata Journal, StataCorp LP, vol. 3(2), pages 168-177, June.
  20. Marina Della Giusta & Sarah Jewell & Uma Kambhampati, 2010. "Anything to Keep You Happy?," Economics & Management Discussion Papers em-dp2010-01, Henley Business School, Reading University.
  21. Paul Frijters & David W. Johnston & Michael A. Shields, 2011. "Life Satisfaction Dynamics with Quarterly Life Event Data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(1), pages 190-211, 03.
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