Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/33486
Authors: 
Graham, Liam
Oswald, Andrew J.
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers 2079
Abstract: 
This paper proposes a new way to think about happiness. It distinguishes between stocks and flows. Central to the analysis is a concept we call 'hedonic capital'. The paper sets out a model of the dynamics of wellbeing in which bad life-shocks are smoothed by the drawing down of hedonic capital. The model fits the patterns found in the empirical literature: the existence of a stable level of wellbeing and a tendency to return gradually towards that level. It offers a theory of hedonic adaptation.
Subjects: 
adaptation
wellbeing
evolution
happiness
habituation
JEL: 
D1
I3
Document Type: 
Working Paper

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