Choices Which Change Life Satisfaction: Revising SWB Theory to Account for Change

Bruce Headey, Ruud Muffels and Gert Wagner

No 1010, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: Using data from the long-running German Socio-Economic Panel (SOEP) 1984-2008, this paper analyses the effects of individual preferences and choices on subjective well-being (SWB). It is shown that preferences and choices relating to life goals/values, partner's personality, hours of work, social participation and healthy lifestyle all have substantial effects on life satisfaction. The results have negative implications for the still dominant theory of SWB, set-point theory. This theory holds that adult SWB does not change in the medium or long term, although temporary fluctuations occur due to specific life events. Set-point theory has come under increasing criticism in recent years, primarily due to unmistakable evidence in SOEP that, during the last 25 years, up to a third of the population has recorded substantial and apparently permanent changes in life satisfaction. It is becoming clear that the main challenge now for SWB researchers is to develop a new theory which can account for medium and long term change, and not merely stability in SWB. Set-point theory is limited precisely because it is purely a theory of stability. The paper is based on a specially constructed SOEP file in which data are divided into five 5-year periods in order to facilitate analysis of medium term change.

Keywords: SWB; set-point theory; life goals; individual choice; panel regression analysis; SOEP (search for similar items in EconPapers)
JEL-codes: I31 J1 Z13 (search for similar items in EconPapers)
Pages: 29 p.
Date: 2010
New Economics Papers: this item is included in nep-ltv
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Citations: View citations in EconPapers (4)

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