Adaptation, assets, and aspirations. Three essays on the economics of subjective well-being

The three essays in this dissertation share in common an attempt to study the effect on subjective well-being of psychological processes along with objective conditions traditionally emphasized in economics.; Do people adapt rapidly and completely to marriage as a recent study of German data concludes? I analyze the role of adaptation---i.e whether people fairly quickly revert to their previous level of well-being---following the formation of partnerships using the German Socio-Economic Panel. On average, marriage has a lasting impact on life satisfaction, equal in magnitude to the effect of cohabitation prior to marriage. The findings do not support the popular notion in psychology that individuals always revert to a set level of happiness no matter how life circumstances change.; Does financial satisfaction only depend on income? In the second essay, I explore the determinants of financial satisfaction, including not only income but also the impact of assets and liabilities. Financial satisfaction steadily increases over the life cycle, whereas household income shows an inverted U-pattern with a peak at midlife. While income has the expected positive relation, increasing financial satisfaction at older age can be partly explained by decreases in liabilities and increases in financial assets. In addition, reduction in the dependency burden at old age leads to increased financial satisfaction while the deterioration of health has a negative impact.; Is adaptation different with regard to economic and non-economic circumstances? In the last essay I analyze differences in the life cycle patterns of aspirations and attainments in the pecuniary and non-pecuniary domains. Pecuniary aspirations---i.e. aspirations for material goods continue to increase over the life course, whereas nonpecuniary aspirations---i.e. aspirations for family, work and health---remain constant or decline. The implication is that the steady increase in pecuniary aspirations can undermine the pursuit of happiness. In contrast, aspirations with regards to marriage do not increase; a finding which supports the results of the first essay that marriage has a lasting effect on well-being. The empirical analysis is based on responses to Roper surveys on the "good life".