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Psychologists and economists take contradictory approaches to research on what psychologists call happiness or subjective well-being, and economists call subjective utility. A direct test of the most widely accepted psychological theory, set-point theory, shows it to be flawed. Results are then given, using the economists' newer "choice approach"--an approach also favored by positive psychologists--which yields substantial payoffs in explaining long-term changes in happiness. Data come from the German Socio-Economic Panel (1984-2008), a unique 25-y prospective longitudinal survey. This dataset enables direct tests of theories explaining long-term happiness.

Long-running German panel survey shows that personal and economic choices, not just genes, matter for happiness