Should bads be inflicted all at once, like Machiavelli said? Evidence from life-satisfaction data

Is wellbeing, measured by life satisfaction, higher if the same number of negative events is spread out rather than bunched in time? Is it better if positive events are spread out or bunched? We answer these questions empirically, exploiting biannual data on six positive and twelve negative life events in the Household, Income and Labour Dynamics in Australia panel. Accounting for selection, anticipation, and adaptation, we find a tipping point when it comes to negative events: once people experience about two negative events, their wellbeing depreciates disproportionally as more and more events occur in a given period of time. For positive events, effects are weakly decreasing in size. So for a person's wellbeing it is better if both the good and the bad is spread out rather than bunched in time. This corresponds better with the classic economic presumption of diminishing marginal effects rather than Machiavelli's prescript of inflicting all injuries at once, further motivating the use of life satisfaction as a suitable proxy for utility. Yet, differences are small, with complete smoothing of all negative events over all people and periods calculated to yield no more than a 12% reduction in the total negative wellbeing impact of negative events.