Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/214605 
Year of Publication: 
2017
Series/Report no.: 
CREMA Working Paper No. 2017-12
Publisher: 
Center for Research in Economics, Management and the Arts (CREMA), Zürich
Abstract: 
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 after facing major life events. Based on individual panel data, we compare people's life satisfaction forecasts reported in the first interview after a major life event with their actual evaluations five years later on. This is done after the individuals experience widowhood, unemployment, disability, marriage, separation or divorce. We find systematic prediction errors that seem at least partly driven by unforeseen adaptation after the first four of these events.
Subjects: 
Adaptation
life satisfaction
life events
projection-bias
subjective well-being
utility prediction
unemployement
JEL: 
D03
D12
D60
I31
Document Type: 
Working Paper

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