This paper addresses the question of when and to what extent individuals are affected by
major positive and negative life events, including changes in financial situation, marital status,
death of child or spouse and being a victim of crime. The key advantage of our data is that
we are able to identify these events on a quarterly basis rather than on the yearly basis used
by previous studies. We find evidence that life events are not randomly distributed, that
individuals to a large extent anticipate major events and that they quickly adapt. These
effects have important implications for the calculation of monetary values needed to
compensate individuals for life events such as crime or death of spouse. We find that our
new valuation methodology that incorporates these dynamic factors produces considerably
smaller compensation valuations than those calculated using the standard approach.