Life Satisfaction and Endogenous Aspirations

Marco Bertoni and Luca Corazzini

No 761, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: Using data from the German Socio-Economic Panel (N = 13,145), we investigate the effects of (not) achieving aspirations on subjective well-being. We match individual-level data about life satisfaction aspirations with their subsequent realizations and we jointly estimate two panel-data equations, the first depicting the effects that (not) achieving initial aspirations exerts on the subsequent level of life satisfaction, and the second describing the endogenous adjustment process followed by aspirations as a function of beaten and unmet targets. We find that while achieving aspirations exerts weak effects on life satisfaction, failing to match aspired conditions significantly reduces subsequent realizations of life satisfaction. Moreover, our analysis supports a "hedonic adaptation" explanation of the previous results, as we find that aspirations significantly adjust to beaten targets, while they remain almost unchanged in case of unmet targets.

Keywords: Aspirations; Affective forecasts; Life Satisfaction; Hedonic Adaptation (search for similar items in EconPapers)
JEL-codes: C83 C99 I31 (search for similar items in EconPapers)
Pages: 15 p.
Date: 2015
New Economics Papers: this item is included in nep-hap
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp761

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