The Half-Life of Happiness: Hedonic Adaptation in the Subjective Well-Being of Poor Slum Dwellers to the Satisfaction of Basic Housing Needs

40 Pages Posted: 10 Apr 2015 Last revised: 3 Mar 2016

See all articles by Sebastian Galiani

Sebastian Galiani

University of Maryland - Department of Economics

Paul J. Gertler

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Raimundo Undurraga

New York University (NYU)

Multiple version iconThere are 2 versions of this paper

Date Written: February 28, 2016

Abstract

A fundamental question in economics is whether happiness increases pari passu with improvements in material conditions or whether humans grow accustomed to better conditions over time. We rely on a large-scale experiment to examine what kind of impact the provision of housing to extremely poor populations in Latin America has on subjective measures of well-being over time. The objective is to determine whether poor populations exhibit hedonic adaptation in happiness derived from reducing the shortfall in the satisfaction of their basic needs. Our results are conclusive. We find that subjective perceptions of well-being improve substantially for recipients of better housing but that after, on average, eight months, 60% of that gain disappears.

Keywords: Happiness, Adaptation, Poverty, Experimental Evidence

JEL Classification: I31, D0

Suggested Citation

Galiani, Sebastian and Gertler, Paul J. and Undurraga, Raimundo, The Half-Life of Happiness: Hedonic Adaptation in the Subjective Well-Being of Poor Slum Dwellers to the Satisfaction of Basic Housing Needs (February 28, 2016). Available at SSRN: https://ssrn.com/abstract=2592256 or http://dx.doi.org/10.2139/ssrn.2592256

Sebastian Galiani (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States

Paul J. Gertler

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States
510-642-1418 (Phone)
510-642-4700 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Raimundo Undurraga

New York University (NYU) ( email )

Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
351
rank
75,427
Abstract Views
5,863
PlumX Metrics