When A Raise Doesn't Feel Like A Raise

Applying the principles of marginal utility of income, the Easterlin paradox, and Kahneman's prospect theory to the idea of employee raises.

Picture this: You've finally landed that coveted job or received a long-awaited promotion, leading to a significant boost in your income. Initially, the extra dollars bring a sense of relief and accomplishment as you pay off debts, indulge in luxuries, and perhaps even plan for the future. But as the novelty wears off, you might find yourself wondering …