Does happiness adapt? A longitudinal study of disability with implications for economists and judges

Abstract

This paper is an empirical study of partial hedonic adaptation. It provides longitudinal evidence that people who become disabled go on to exhibit considerable recovery in mental well-being. In fixed-effects equations we estimate the degree of hedonic adaptation at --depending on the severity of the disability --approximately 30% to 50%. Our calculations should be viewed as illustrative; more research, on other data sets, is needed. Nevertheless, we discuss potential implications of our results for economists and the courts.

Estimating the causal effect of alcohol consumption on well-being for a cross-section of 9 former Soviet Union countries

“…These questions draw upon a longstanding literature in psychology (Diener, Suh, Lucas, & Smith, 1999) and their use is rapidly expanding and gaining prominence within economics more generally (Di Tella & MacCulloch, 2006) and health economics in particular (Oswald & Powdthavee, 2008). Subjective well-being questions have been validated and modelled across contexts and countries (Blanchflower & Oswald, 2004) and are regarded as good empirical approximation of individual well-being and utility (Frey & Stutzer, 2002;Oswald & Powdthavee, 2008). Previous applications of well-being on Eastern European countries (Blanchflower & Oswald, 2007;Hayo & Seifert, 2003) have confirmed the findings of past literature, further validating the implementation of such instruments among fSU countries.…”

Does education buffer the impact of disability on psychological distress?

“…Compelling evidence shows that the onset of a disability is a source of psychological distress (Choi & Marks, 2008;Lucas, 2007;Manor et al, 2001;Oswald & Powdthavee, 2008). People who become disabled have to deal with the loss of bodily function, irrespective of physical pain, and this can lead to a sense of loss and to mourning.…”

“…People may differ in the timing, process and severity of their illnesses. The 10-year time interval between the waves of the NCDS makes us lump together distant and recent disability onsets, although the effects of a recently started disability may be quite different from a disability that started longer ago (Lucas, 2007;Oswald & Powdthavee, 2008;Stanton et al, 2007). The disabilities we investigated are probably the result of on the one hand older chronic illnesses and more recent illnesses.…”

Money or mental health: the cost of alleviating psychological distress with monetary compensation versus psychological therapy

“…Monetary values have been calculated across numerous areas of life including; marriage (Blanchflower and Oswald, 2004), social relationships (Powdthavee, 2008), the fear of crime (Moore and Shepherd, 2006), noise (Van Praag and Baarsma, 2005), health (Ferrer-i-Carbonell and van Praag, 2002) and disabilities (Oswald and Powdthavee, 2008b). The income equivalences attached to such events are typically large.…”