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

We present econometric evidence consistent with the existence of hedonic adaptation -- to use the term of Frederick and Loewenstein 1999 -- to disability

Andrew J. Oswald

2008

Scholarcy highlights

  • Many writings in the psychology literature argue that utility recovers after a bad life shock
  • We present econometric evidence consistent with the existence of hedonic adaptation -- to use the term of -- to disability
  • Wilson and Gilbert suggest that hedonic adaptation is not reducible to the type of adaptation found in the sensory systems
  • In the fixed-effects specification of column 6 of Table 1, it is not possible to reject the null of approximately 100% adaptation to moderate disability, and there is more than 60% adaptation to severe disablement
  • This paper studies shocks to utility and how human beings respond to them
  • Our focus is on disability, but the paper’s message is potentially a more general one
  • Such methods may eventually come to have practical applications, such as in courts of law

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