Happiness: Revising Set-Point Theory and Dynamic Equilibrium Theory to Account for Long Term Change

An adequate theory of happiness or subjective well-being (SWB) needs to link at least three sets of variables: stable person characteristics, life events and measures of well-being (life satisfaction, positive affects) and ill-being (anxiety, depression, negative affects). By including personality measures in the 2005 survey, SOEP becomes the first available dataset to provide long term evidence about personality, life events and change in one key measure of SWB, namely life satisfaction. Using these data, the paper suggests a major revision to the set-point or dynamic equilibrium theory of SWB in order to account for long term change.