The Anatomy of Subjective Well-being

This paper contributes to the literature on Subjective Well-Being by taking into account different aspects of life, called domains, such as health, financial situation, job, leisure, housing, and environment. We postulate a two-Iayer model where individual total Subjective Well-Being depends on the different subjective domain satisfactions. A distinction is made between long-term and short-term effects. The individual domain satisfactions depend on objectively measurable variables such as income. The model is estimated using a large German panel data set.