The theoretical tendency for humans to return to a fixed level of happiness over time, regardless of large positive or negative events happening in their life. As a result, people are always making efforts to gain money and improve their lives, but their happiness level stays the same. A person's fixed level seems to be governed by their genetics, uncontrollable circumstances, and the activities that they engage themselves in.

Understanding how to manipulate and return to a person's fixed point can be useful in identifying and treating depression, and the model helps to explain why even successful people can suffer from depressive episodes.