Thompson Rivers University

Does winning a lottery make you happier forever?

  Posted on: November 25, 2015

Dr. Latif, Associate Professor of Economics at Thompson Rivers University, used longitudinal data from the Canadian National Population Health Survey (1994-2009), to examined the short run and long run effects of a one-time increase in income on individual happiness. After control for the unobserved individual specific heterogeneity and using three different specifications he found that current income has a significant positive effect on individual happiness. However in all specifications, the sums of the lags were negative, suggesting a presence of adaptation effects. In other words, this study suggests that an increase in income temporarily increases people’s happiness, but the effects wear off as people get used to new levels of income. The study also estimated the happiness model separately for male and female samples. In both cases, this study found evidence of adaptation of happiness with respect to changes in income. His research entitled: “Happiness Adaptation to Income: Evidence from Canada.” was published recently in the Journal Economics Bulletin.