An Examination of the Dynamics of Happiness Using Vector Autoregressions

Martin Binder () and Alex Coad ()

Papers on Economics and Evolution from Max Planck Institute of Economics, Evolutionary Economics Group

Abstract: We use a panel vector autoregressions model to examine the coevolution of changes in happiness and changes in income, health, marital status as well as employment status for the British Household Panel Survey (BHPS) data set. This technique allows us to simultaneously analyze the impact of the aforementioned factors on each other. We find that increases in happiness are associated with subsequent increases in income, marriage, employment, and health variables, while increases in the these life-domain variables (except health) tend to be followed by decreases in happiness in subsequent periods, suggesting adaptation dynamics in all domains. These findings are quite robust to different model specifications.

Keywords: Happiness dynamics; vector autoregressions; subjective well-being; BHPS Length 36 pages (search for similar items in EconPapers)
JEL-codes: I31 D63 C33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hap
Date: 2009-04
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Persistent link: http://EconPapers.repec.org/RePEc:esi:evopap:2009-04

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