Arbeitspapier

(Mis-)Predicted Subjective Well-Being Following Life Events

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The correct prediction of how alternative states of the world affect our lives is a cornerstone of economics. We study how accurate people are in predicting their future well-being when facing major life events. Based on individual panel data, we compare people's forecast of their life satisfaction in five years' time to their actual realisations later on. This is done after the individuals experience widowhood, marriage, unemployment or disability. We find systematic prediction errors that are at least partly driven by unforeseen adaptation.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 9252

Classification
Wirtschaft
Consumer Economics: Empirical Analysis
Welfare Economics: General
General Welfare; Well-Being
Subject
adaptation
life satisfaction
life events
projection-bias
subjective well-being
utility prediction
unemployment

Event
Geistige Schöpfung
(who)
Odermatt, Reto
Stutzer, Alois
Event
Veröffentlichung
(who)
Institute for the Study of Labor (IZA)
(where)
Bonn
(when)
2015

Handle
Last update
10.03.2025, 11:44 AM CET

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Object type

  • Arbeitspapier

Associated

  • Odermatt, Reto
  • Stutzer, Alois
  • Institute for the Study of Labor (IZA)

Time of origin

  • 2015

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