Exploring Heterogeneity in Happiness: Evidence from a Japanese Longitudinal Survey

The present research explores the heterogeneity in trajectories of subjective well-being of Japanese citizens using longitudinal data collected with the Preference Parameters Study from 2003 to 2018. The analysis is carried out through the hidden Markov model that assumes a latent process underlying the individual perception of happiness observed through a categorical response variable. The first-order Markov chain is parameterized in terms of initial and transition probabilities depending on time-constant and time-varying socioeconomic and demographic variables. Maximum likelihood estimation of model parameters accounts for longitudinal sampling weights and missing responses under the Missing-At-Random assumption. Through this model-based clustering approach, we discover three clusters of individuals showing different dynamics across the life course, each of which represents, namely “not so happy”, “moderately happy”, and “very happy” individuals. We find that males tend to be less happy than females, and a U-shaped association between happiness and age is not detected. Each state has a substantial persistence over time, meaning that initial happiness perceptions play an important role in the life course inequalities of subjective well-being.