Does Happiness Adapt? A Longitudinal Study of Disability with Implications for Economists and Judges

40 Pages Posted: 31 Jul 2006

See all articles by Andrew J. Oswald

Andrew J. Oswald

University of Warwick - Department of Economics; IZA Institute of Labor Economics

Nattavudh Powdthavee

University of Warwick

Date Written: July 2006

Abstract

Economics ignores the possibility of hedonic adaptation (the idea that people bounce back from utility shocks). This paper argues that economists are wrong to do so. It provides longitudinal evidence that individuals who become disabled go on to exhibit recovery in mental wellbeing. Adaptation to severe disability, however, is shown to be incomplete. The paper suggests ways to calculate the level of compensatory damages for the pain and suffering from disablement. Courts all over the world currently use ad hoc methods.

Keywords: disability, adaptation, happiness, legal compensation, wellbeing, GHQ scores

JEL Classification: D1, I3, I31, K0

Suggested Citation

Oswald, Andrew J. and Powdthavee, Nattavudh, Does Happiness Adapt? A Longitudinal Study of Disability with Implications for Economists and Judges (July 2006). IZA Discussion Paper No. 2208. Available at SSRN: https://ssrn.com/abstract=921040

Andrew J. Oswald (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
523510 (Phone)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Nattavudh Powdthavee

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom
+44 (0)2476 528240 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
260
Abstract Views
1,653
rank
115,871
PlumX Metrics