The Structure of Subjective Well-being: A Vector Autoregressive Approach

Abstract

We use panel vector autoregressions to analyze the underlying structure of changes in subjective well-being and its coevolution with changes in income, health, worries, marital status and employment status for the German Socio-Economic Panel (SOEP) data set. We find that positive changes in the named life domains are followed by decreases in subjective well-being (except for health, which is followed by well-being increases). Positive changes in well-being are followed by positive changes in most life domains. We also examine how the structure of subjective well-being differs with respect to different Big Five personality traits.