Adaptation to Income over Time: A Weak Point of Subjective Well-Being

Christoph Wunder

No 130, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: This article holds the view that intertemporal comparisons of subjective well-being measures are only meaningful when the underlying standards of judgment are unaltered. This is a weak point of such measures. The study investigates the change in the satisfaction judgments resulting from adaptation to income over time. Adaptation is defined to be desensitization (sensitization) to the hedonic effect of income resulting from an upward (downward) adjustment of the standards. A framework is introduced that provides empirical estimates for the rate of adaptation using data from the Socio-Economic Panel Study (SOEP).

Keywords: Adaptation; financial satisfaction; subjective well-being; standards of judgment (search for similar items in EconPapers)
JEL-codes: C23 I31 (search for similar items in EconPapers)
Pages: 17 p.
Date: 2008
New Economics Papers: this item is included in nep-hap
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp130

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