Memory and subjective well-being: an empirical analysis of endogenous memory behavior in workers and consumers.

Summary In this thesis we explore how individuals who report different levels of well-being remember economic information differently. In the first chapter we first show a correlation between the way people remember their salary and their level of satisfaction with it: relatively more satisfied employees tend to overestimate their salary, while relatively less satisfied employees tend to underestimate it. In the second chapter we try to understand how people who are more or less satisfied with their lives remember their past well-being differently. Again, a deep asymmetry is discovered: happy people tend to overestimate the evolution of their happiness over time, while unhappy people tend to underestimate it. The third chapter is devoted to the study of the causes of this asymmetry in memory patterns. In a laboratory experiment we study whether individuals forget a failure because they are doing well or in order to get better. Our results support the second hypothesis but contradict the first. The fourth and final chapter draws on the knowledge built in the previous chapters and uses individual memories to study the heterogeneous effect of inflation on material welfare inequalities.