People do not adapt. New analyses of the dynamic effects of own and reference income on life satisfaction

Kaiser, Caspar

doi:10.1016/j.jebo.2020.06.003

Cited by 15 publications

(11 citation statements)

References 55 publications

(88 reference statements)

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“…This result contrasts sharply with the previous literature, which documents a strong positive effect of incomes on mental health, happiness, and life satisfaction across and within persons (Gardner & Oswald, 2007;Layard et al, 2008;Vendrik 2013;Jebb et al, 2018;Kaiser, 2020). However, our results do agree with Kushlev et al, (2015) and Stone et al, (2018) who also use ATUS data on happiness.…”

Section: Subgroup Analysis Of Historical Trends In Time-weighted Happinesscontrasting

confidence: 99%

Time use and happiness: Evidence across three decades

Han

Kaiser²

2021

SSRN Journal

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We use diary data from representative samples of Americans to examine historical trends in happiness at both the individual activity-level and aggregate-level. At the activity-level, domestic work and social care produce more happiness today compared to 1985. Watching TV produces less happiness than it used to. At the aggregate level, we combine information on happiness and time allocation to construct a measure of 'time-weighted happiness'. Over the last 35 years, women's time-weighted happiness has improved significantly relative to men's. This observation is in stark contrast to previous work which showed a decline in women's relative wellbeing. To explain this, we compare the determinants of life satisfactiona more global measure on which most previous work is builtwith our measure of time-weighted happiness. Time-weighted happiness and life satisfaction turn out to only be weakly correlated. Moreover, although we obtain strong associations of income and employment status with life satisfaction, no such associations can be observed for time-weighted happiness. Thus, the determinants and historical patterns of momentary happiness and more global measures fail to coincide. This highlights the importance of distinguishing and striking a balance between these wellbeing measures when analysing and designing policy.

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Section: Subgroup Analysis Of Historical Trends In Time-weighted Happinesscontrasting

confidence: 99%

Time use and happiness: Evidence across three decades

Han

Kaiser²

2021

SSRN Journal

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“…By the same logic, the controls at time t − k (for k >0) can also be correlated with major financial shocks at time t − k . When we consider the relations between past financial profiles and current well‐being, not controlling for lags in the controls can produce omitted‐variable bias (Ferrer‐i‐Carbonell and Van Praag, 2008; Vendrik, 2013; Kaiser, 2020). The bias in our case can especially result from omitted lags of household income.…”

Section: Resultsmentioning

confidence: 99%

“…One tricky question is the determination of the appropriate number of lags (Vendrik, 2013; Kaiser, 2020). On the one hand, with more lags the estimations are less likely to suffer from omitted‐variable bias; on the other hand, additional lags can significantly reduce the number of panel observations and also lead to a loss in efficiency in the estimates as current‐ and previous‐year income are strongly correlated.…”

Section: Resultsmentioning

confidence: 99%

“…We repeat the process until we reject the null hypothesis. This approach produces an appropriate lag length of one, which is the same as that in Kaiser (2020) using panel data from the UK and Germany. Thus, we add a one‐year lag in household income to the FE estimations of Section IV.…”

Section: Resultsmentioning

confidence: 99%

“…We include X it when estimating Equation 3, as major financial shocks at time t may be correlated with some of the explanatory variables at time t. By the same logic, the controls at time t-k (for k>0) may also be correlated with major financial shocks at time t-k. When we consider the relations between past financial profiles and current well-being, not controlling for lags in the controls can produce omitted-variable bias (Ferrer-i Carbonell and Van Praag, 2008;Vendrik, 2013;Kaiser, 2018).…”

Section: Controlling For Lagged Household Incomementioning

confidence: 99%

See 2 more Smart Citations

Living in the Shadow of the Past: Financial Profiles and Well‐Being*

Clark

D’Ambrosio

Zhu

2021

Scandinavian J Economics

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We here consider the link between individual financial profiles over time and well-being, as measured by life satisfaction. We in particular look at annual self-reported financial worsening and improvement information for over 25,000 individuals in Australian panel data from 2002 to 2017. We first find that satisfaction falls (rises) with a contemporaneous major financial worsening (improvement), with worsening having the larger influence. Second, the experience of these financial events in the past continues to be linked to current well-being. Last, only the order of financial-improvement spells relates to well-being: a given number of past years where finances deteriorated has the same association with current well-being whether the deterioration occurred in one continuous spell or was interrupted. We last show that these associations are heterogeneous over the distribution of well-being.

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The lost value for users of cultural institutions during the COVID-19 pandemic: a life satisfaction approach

Baldin

Bille

2023

Int Rev Econ

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Studies related to the assessment of the non-market values of culture typically employ methods based on stated or revealed preferences. In this paper, we implement a new emerging non-market valuation technique, namely the life satisfaction approach. In particular, we quantify in monetary values, the additional utility that people benefit from cultural experiences, as well as the additional disutility suffered by cultural consumers specifically due to the closure of cultural organisations during the COVID-19 pandemic, as the pandemic provides a unique setting. Using a survey conducted in Denmark in the spring of 2020, we confirm the link between cultural participation and well-being by estimating a life satisfaction model, instrumenting for both income and cultural participation to avoid simultaneity problems. Furthermore, we show that fervent cultural consumers have experienced an additional welfare loss during the lockdown period, controlling for all other known life dimensions affected by the pandemic. Our results aim to highlight the role of cultural participation in sustaining life satisfaction and, consequently, to support a well-being evidence-based cultural policy that facilitate cultural accessibility as a mean to increase the individual well-being.

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People do not adapt. New analyses of the dynamic effects of own and reference income on life satisfaction

Cited by 15 publications

References 55 publications

Time use and happiness: Evidence across three decades

Time use and happiness: Evidence across three decades

Living in the Shadow of the Past: Financial Profiles and Well‐Being*

The lost value for users of cultural institutions during the COVID-19 pandemic: a life satisfaction approach

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