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 compare the long run effects. We can (cannot)...

The Easterlin Paradox refers to the fact that happiness data are typically stationary in spite of considerable increases in income. This amounts to a rejection of the hypothesis that current income is the only argument in the utility function. We find that the happiness responses of around...

We study the effect of the level of inequality in society on individual well-being using a total of 123,668 answers to a survey question about “happinessâ€. We find that individuals have a lower tendency to report themselves happy when inequality is high, even after controlling for...