Car ownership and hedonic adaptation
Johannes Emmerling and
Journal of Economic Psychology, 2017, vol. 61, issue C, 29-38
Using panel data from the UK, we study the long-term effect of purchase decisions of automobiles on individuals’ happiness. We find a significant and sizable decrease in individual happiness in the years after a car purchase. We develop a model of hedonic adaptation that can explain these results. Applying the model to the data indicates a strong degree of habit persistence of around 80%, and that within five years after a purchase, around one third of the happiness increase is dissipated due to hedonic adaptation.
Keywords: Hedonic adaptation; Happiness; Habit persistence; Durable consumption goods (search for similar items in EconPapers)
JEL-codes: I31 D12 D91 E21 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:61:y:2017:i:c:p:29-38
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