Car ownership and hedonic adaptation
Using panel data from the UK, we study the long-term effect of purchase decisions of automobiles on individuals’ happiness. We find a significant and sizable decrease in individual happiness in the years after a car purchase. We develop a model of hedonic adaptation that can explain these results. Applying the model to the data indicates a strong degree of habit persistence of around 80%, and that within five years after a purchase, around one third of the happiness increase is dissipated due to hedonic adaptation.
Journal of Economic Psychology
Volume and page numbers
61 , 29 -38
University of Essex, Albert Sloman Library Periodicals *restricted to University of Essex registered users* - http://serlib0.essex.ac.uk/record=b1646364~S5