Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119310
Authors: 
Odermatt, Reto
Stutzer, Alois
Year of Publication: 
2015
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 787
Abstract: 
The correct prediction of how alternative states of the world affect our lives is a cornerstone of economics. We study how accurate people are in predicting their future well-being when facing major life events. Based on individual panel data, we compare people's forecast of their life satisfaction in five years' time to their actual realisations later on. This is done after the individuals experience widowhood, marriage, unemployment or disability. We find systematic prediction errors that are at least partly driven by unforeseen adaptation.
Subjects: 
adaptation
life satisfaction
life events
projection-bias
subjective well-being
utility prediction
unemployment
JEL: 
D03
D12
D60
I31
Document Type: 
Working Paper

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