Richard A. Easterlin discusses the determinants of happiness, challenging the psychological "setpoint theory" and economic "more is better" theories. He argues that life events in the nonpecuniary domain, such as marriage, divorce, and disability, have lasting effects on happiness, and that adaptation and social comparison reduce the impact of income on happiness. He suggests that individuals overvalue pecuniary goals and undervalue nonpecuniary ones, leading to reduced happiness. He also finds that health and marital status significantly affect happiness, with adverse changes having lasting negative effects. Marriage generally increases happiness, while dissolution decreases it. Aspirations in different domains respond differently to changes in circumstances, with material goods showing more complete adaptation than family or health. Easterlin proposes a better theory of happiness that considers the role of adaptation and social comparison in different domains, and suggests that policies should aim to improve individual preferences to enhance well-being. He concludes that economic policy should also consider individual preferences, as they play a significant role in happiness.Richard A. Easterlin discusses the determinants of happiness, challenging the psychological "setpoint theory" and economic "more is better" theories. He argues that life events in the nonpecuniary domain, such as marriage, divorce, and disability, have lasting effects on happiness, and that adaptation and social comparison reduce the impact of income on happiness. He suggests that individuals overvalue pecuniary goals and undervalue nonpecuniary ones, leading to reduced happiness. He also finds that health and marital status significantly affect happiness, with adverse changes having lasting negative effects. Marriage generally increases happiness, while dissolution decreases it. Aspirations in different domains respond differently to changes in circumstances, with material goods showing more complete adaptation than family or health. Easterlin proposes a better theory of happiness that considers the role of adaptation and social comparison in different domains, and suggests that policies should aim to improve individual preferences to enhance well-being. He concludes that economic policy should also consider individual preferences, as they play a significant role in happiness.