This paper is an empirical study of partial hedonic adaptation. It provides longitudinal evidence that people who become disabled go on to exhibit considerable recovery in mental well-being. In fixed-effects equations we estimate the degree of hedonic adaptation at — depending on the severity of the disability — approximately 30% to 50%. Our calculations should be viewed as illustrative; more research, on other data sets, is needed. Nevertheless, we discuss potential implications of our results for economists and the courts.
Oswald, A. J., &Powdthavee, N. (2008). Does happiness adapt? A longitudinal study of disability with implications for economists and judges. Journal of public economics, 92(5-6), 1061-1077.