Happiness Dynamics, Reference Dependence, and Motivated Beliefs in U.S. Presidential Elections

Miles Kimball, Collin B. Raymond, Jiannan Zhou, Junya Zhou, Fumio Ohtake and Yoshiro Tsutsui ()

No 32078, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Collecting and analyzing panel data over the last four U.S. presidential elections, we study the drivers of self-reported happiness. We relate our empirical findings to existing models of elation, reference dependence, and belief formation. In addition to corroborating previous findings in the literature (hedonic asymmetry/hedonic loss aversion, hedonic adaptation and motivated beliefs), we provide novel results that extend the literature in four dimensions. First, happiness responds to changes relative to both the political status quo (i.e., the incumbent presidential party) and the expected electoral outcome, providing support for two major hypotheses regarding reference point formation. Individuals exhibit hedonic loss aversion to deviations from expectations, but hedonic loss neutrality to changes from the status quo. Second, the speed of hedonic adaptation to deviations from the status quo is significantly slower than the speed of hedonic adaptation to surprises. Third, expectations affect happiness in a nonlinear way, consistent with Gul’s model of disappointment aversion, but contrary to other influential reference-dependent models. Fourth, both “objective” and motivated subjective beliefs matter for the happiness reactions, although subjective beliefs matter more.

JEL-codes: D03 D72 D91 I31 (search for similar items in EconPapers)
Date: 2024-01
New Economics Papers: this item is included in nep-evo, nep-hap and nep-pol
Note: AG POL
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w32078.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:32078

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w32078
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().