Explaining happiness

Abstract

What do social survey data tell us about the determinants of happiness? First, that the psychologists' setpoint model is questionable. Life events in the nonpecuniary domain, such as marriage, divorce, and serious disability, have a lasting effect on happiness, and do not simply deflect the average person temporarily above or below a setpoint given by genetics and personality. Second, mainstream economists' inference that in the pecuniary domain ''more is better,'' based on revealed preference theory, is problematic. An increase in income, and thus in the goods at one's disposal, does not bring with it a lasting increase in happiness because of the negative effect on utility of hedonic adaptation and social comparison. A better theory of happiness builds on the evidence that adaptation and social comparison affect utility less in the nonpecuniary than pecuniary domains. Because individuals fail to anticipate the extent to which adaptation and social comparison undermine expected utility in the pecuniary domain, they allocate an excessive amount of time to pecuniary goals, and shortchange nonpecuniary ends such as family life and health, reducing their happiness. There is need to devise policies that will yield better-informed individual preferences, and thereby increase individual and societal well-being.living level ͉ health ͉ marital status ͉ aspirations

“…Do it with joy!” – Subjective well-being outcomes of working in non-profit organizations

“…When doing so, a number of additional covariates need to be taken into account (Dolan et al, 2008). Life satisfaction has been shown to be reliably influenced by social relations (Becchetti et al, 2008), health (Easterlin, 2003), marital status (Lucas, 2005;Stutzer and Frey, 2006), unemployment (Clark and Oswald, 1994;Lucas et al, 2004), to some extent income (Easterlin, 1974;Stevenson andWolfers, #1503 2008;Ahuvia, 2008), as well as other demographic factors, which will need to be controlled for (see more extensively Dolan et al, 2008;Helliwell and Wang, 2012). Important for the purpose at hand are findings that not only employment per se plays a positive role for life satisfaction but also the type of work (Wulfgramm, 2011;Binder and Coad, 2013), hours worked and working conditions (Meier and Stutzer, 2008;Bardasi and Francesconi, 2004).…”

Does happiness adapt? A longitudinal study of disability with implications for economists and judges

“…One of the few empirical economists to study the phenomenon of utility adaptation has been Easterlin (2001Easterlin ( , 2003Easterlin ( , 2005. He argues that adaptation exists but is generally incomplete, namely, that people do not merely automatically return to a baseline level of happiness 3 .…”

Perceived risk of HIV infection and mental health in rural Malawi

“…Deterioration of health, particularly accompanied by symptoms such as weight loss, diarrhea, and failure to respond to treatment, is one of the important cues for self-assessing a greater risk of HIV infection (Watkins 2004). At the same time, poor health is a robust predictor of deterioration of mental well-being (Blanchflower and Oswald 2004;Easterlin 2003;Kahneman and Krueger 2006). Therefore, it is likely that the condition of an individual's health shapes the subjective assessment of HIV risk and mental health simultaneously and is partially responsible for their observed correlation.…”