This paper models the relationship between income and reported well-being using latent class techniques applied to panel data from twelve European countries. Introducing both intercept and slope heterogeneity into this relationship, we strongly reject the hypothesis that individuals transform...

We look for evidence of habituation in twenty waves of German panel data: do individuals tend to return to some baseline level of well-being after life and labour market events? Although the strongest life satisfaction effect is often at the time of the event, we find significant lag and lead...