Using 20 years of nationally representative panel data in South Korea, we estimate how life satisfaction responds to income shocks. We document that unexpected income changes significantly impact an individual's life satisfaction, and the magnitudes depend on the persistence of income shocks. We...

Given that divorce often represents an income gamble, we ask how individual levels of risk tolerance affect the decision to divorce. Instead of choosing divorce whenever its expected utility exceeds the expected utility of continued marriage, risk averse individuals should require additional...