We test for whether, once "basic needs" are satisfied, there is happiness adaptation to further gains in income using … greater happiness. The reason appears to be adaptation. However even for the rich half of European nations such habituation … may take over 5 years so the happiness gains that they experience, whilst not permanent, can still be relatively long …

We study "habituation" to income and to status using individual panel data on the happiness of 7,812 people living in … Germany from 1984 to 2000. Specifically, we estimate a "happiness equation" defined over several lags of income and status and … standard deviation in income are associated with similar increases in happiness. In the long-run (five year average) a one …