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

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.

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Year of publication:	2006-07
Authors:	Oswald, Andrew J. ; Powdthavee, Nattavudh
Institutions:	Institute for the Study of Labor (IZA)
Subject:	disability \| adaptation \| happiness \| legal compensation \| wellbeing \| GHQ scores

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Extent:	application/pdf
Series:	IZA Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 2208 40 pages
Classification:	D1 - Household Behavior and Family Economics ; I3 - Welfare and Poverty ; I31 - General Welfare; Basic Needs; Quality of Life ; K0 - Law and Economics. General
Source:	RePEc - Research Papers in Economics