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Happiness adaptation to high income: Evidence from German panel data

Aufsätze referiert extern - Web of Science

Jianbo Luo

In: Economics Letters 206 (2021), 109995


This paper is the first to use national representative panel data to demonstrate that individuals do not adapt to high income in the long run: after five or more years, the life satisfaction of high-income people is still higher than that of the average population. Using entropy balancing (EB) matching and Lasso variable selection to reweight the control group yields similar results.

Keywords: High income; Subjective well-being; Adaptation; Entropy balancing; Machine learning Lasso