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. ? The Author(s) 2018. Published by Oxford University Press on behalf of European Economic Association. All rights reserved.

---

1 February 2019

---

Journal of the European Economic Association 17(1) , pp.245-283, 2019

---

DOI: 10.1093/jeea/jvy005

https://academic.oup.com/jeea/article/17/1/245/4961435

This Journal article is published under the centre's Community Wellbeing programme.