Social Indicators Research

, Volume 118, Issue 1, pp 181–203 | Cite as

Who Settles for Less? Subjective Dispositions, Objective Circumstances, and Housing Satisfaction



In recent years there has been growing interest in individuals’ self-perceptions of their wellbeing on the grounds that these complement well-established objective indicators of welfare. However, individuals’ assessments depend on both objective circumstances and subjective, idiosyncratic dispositions, such as aspirations and expectations. We add to the literature by formulating a modelling strategy that uncovers how these subjective dispositions differ across socio-demographic groups. This is then tested using housing satisfaction data from a large-scale household panel survey from Australia. We find that there are significant differences in the way in which individuals with different characteristics rate the same objective reality. For instance, male, older, migrant, and Indigenous individuals rate equal housing conditions more favourably than female, younger, Australian-born, and non-Indigenous individuals. These findings have important implications for how self-reported housing satisfaction, and wellbeing data in general, are to be used to inform evidence-based policy.


Wellbeing Satisfaction Housing Subjective dispositions Housing conditions Fixed effects 



We would like to thank Mark Western, Cameron Parsell, and an anonymous referee for helpful comments and suggestions on an earlier draft which substantively improved this work. This paper uses data from the Household, Income and Labour Dynamics in Australia Survey, funded by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs and managed by the Melbourne Institute of Applied Economic and Social Research.


  1. Barresi, C. M., Ferraro, K. F., & Hobet, L. L. (1984). Environmental satisfaction, sociability, and well-being among urban elderly. International Journal of Aging and Human Development, 18, 277–293.CrossRefGoogle Scholar
  2. Baxter, J., Hewitt, B., & Haynes, M. (2008). Life course transitions and housework: Marriage, parenthood and time on housework. Journal of Marriage and the Family, 70, 259–272.CrossRefGoogle Scholar
  3. Blanchflower, D., & Oswald, A. (2004). Well-being over time in Britain and the USA. Journal of Public Economics, 88(7–8), 1359–1386.CrossRefGoogle Scholar
  4. Blanchflower, D., & Oswald, A. (2008). Is well-being u-shaped over the life cycle? Social Science and Medicine, 66(8), 1733–1749.CrossRefGoogle Scholar
  5. Booth, A., & Bryan, M. (2004). The union membership wage-premium puzzle: Is there a free rider problem? Industrial and Labor Relations Review, 57(3), 402–421.CrossRefGoogle Scholar
  6. Bronfenbrenner, U., & Evans, G. W. (2000). Developmental science in the 21st century. Social Development, 9, 115–125.CrossRefGoogle Scholar
  7. Campbell, A., Converse, P., & Rodgers, W. (1976). The quality of American life. New York: Russell Sage.Google Scholar
  8. Clark, A. E. (2007). Born to be mild? Cohort effects don’t (fully) explain why well-being is U-shaped in age. IZA discussion paper no. 3170.Google Scholar
  9. Clark, A. E., & Oswald, A. J. (1994). Unhappiness and unemployment. Economic Journal, 104(424), 648–659.CrossRefGoogle Scholar
  10. Clark, A. E., Oswald, A. J., & Warr, P. B. (1996). Is job satisfaction U-shaped in age? Journal of Occupational and Organizational Psychology, 69, 57–81.CrossRefGoogle Scholar
  11. Della Giusta, M., Jewell, S., & Kambhampati, U. (2011). Gender and life satisfaction in the UK. Feminist Economics, 17(3), 1–34.CrossRefGoogle Scholar
  12. Diaz-Serrano, L. (2009). Disentangling the housing satisfaction puzzle: Does homeownership really matter? Journal of Economic Psychology, 30(5), 745–755.CrossRefGoogle Scholar
  13. Diaz-Serrano, L., & Stoyanova, A. P. (2010). Mobility and housing satisfaction: An empirical analysis for 12 EU countries. Journal of Economic Geography, 10(5), 661–683.CrossRefGoogle Scholar
  14. Diener, E., Suh, E. M., Lucas, R. E., & Smith, H. L. (1999). Subjective wellbeing: Three decades of progress. Psychological Bulletin, 125, 276–302.CrossRefGoogle Scholar
  15. Dolan, P., Peasgood, T., & White, M. (2008). Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective wellbeing. Journal of Economic Psychology, 29, 94–122.CrossRefGoogle Scholar
  16. Easterlin, R. A. (2003). Happiness of women and men in later life: Nature, determinants, and prospects’. In M. J. Sirgy, D. Rahtz, & A. C. Samli (Eds.), Advances in quality-of-life theory and research. Dordrecht: Kluwer.Google Scholar
  17. Ferrer-i-Carbonell, A., & Frijters, P. (2004). How important is methodology for the estimates of the determinants of happiness? The Economic Journal, 114(497), 641–659.CrossRefGoogle Scholar
  18. Francescato, G., Weidemann, S., Anderson, J. R., & Chenoweth, R. (1974). Evaluating residents’ satisfaction in housing for low and moderate income families: A multi-method approach. In D. H. Carson (Ed.), Man-environment interactions: Evaluation and applications. Washington: Environmental Design Research Association.Google Scholar
  19. Frey, B., & Stutzer, A. (2002). Happiness and economics: How the economy and institutions affect human well-being. Princeton: Princeton University Press.Google Scholar
  20. Frijters, P., & Beatton, T. (2012). The mystery of the U-shaped relationship between happiness and age. Journal of Economic Behavior & Organization, 82(2–3), 525–542.CrossRefGoogle Scholar
  21. Galster, G. (1987). Identifying the correlates of dwelling satisfaction: An empirical critique. Environment and Behavior, 19, 539–568.CrossRefGoogle Scholar
  22. Galster, G., & Hesser, G. (1981). Residential satisfaction: Compositional and contextual correlates. Environment and Behavior, 13, 735–758.CrossRefGoogle Scholar
  23. Iacovou, M. (2010). Leaving home: Independence, togetherness and income. Advances in Life Course Research, 15(4), 147–160.CrossRefGoogle Scholar
  24. Inglehart, R. (2002). Gender, aging, and subjective well-being. International Journal of Comparative Sociology, 43(3–5), 391–408.CrossRefGoogle Scholar
  25. Jacobs, D., Wilson, J., Dixon, S., Smith, J., & Evens, A. (2009). The relationship of housing and population health: A 30-year retrospective analysis. Environmental Health Perspectives, 117, 597–604.Google Scholar
  26. Jones, K., & Duncan, C. (1996). People and places: The multilevel model as a general framework for the quantitative analysis of geographical data. In P. Longley & M. Batty (Eds.), Spatial analysis: Modelling in a GIS environment. Cambridge: Geoinformation International.Google Scholar
  27. Kahneman, D., & Krueger, A. (2006). Developments in the measurement of subjective well-being. Journal of Economic Perspectives, 20(1), 3–24.CrossRefGoogle Scholar
  28. Marcelli, E., & Easterlin, R. (2005). Beyond gender differences in US life cycle happiness. Working papers 2, Department of Economics, University of Massachusetts Boston.Google Scholar
  29. McKay, S. (2004). Poverty or preference: What do ‘consensual deprivation indicators’ really measure? Fiscal Studies, 25(2), 201–223.CrossRefGoogle Scholar
  30. Melbourne Institute of Applied Economic and Social Research. (2012). HILDA survey annual report 2011. Available online at:
  31. Merton, R. K. (1957). Continuities in the theory of reference groups and social structure. In R. K. Merton (Ed.), Social theory and social structure. Glencoe: Free Press.Google Scholar
  32. Michalos, A. C. (1985). Multiple discrepancies theory (MDT). Social Indicators Research, 16(4), 347–413.CrossRefGoogle Scholar
  33. Morgan, S. L. (2006). Expectations and aspirations. In G. Ritzer (Ed.), The Blackwell encyclopedia of sociology. Malden: Blackwell.Google Scholar
  34. Mroczek, D., & Kolarz, C. (1998). The effect of age on positive and negative affect: A developmental perspective on happiness. Journal of Personality and Social Psychology, 75(5), 1333–1349.CrossRefGoogle Scholar
  35. Nakazato, N., Schimmack, U., & Oishi, S. (2011). Effect of changes in living conditions on wellbeing: A prospective top–down bottom–up model. Social Indicators Research, 100(1), 115–135.CrossRefGoogle Scholar
  36. Neutze, M. (2010). Housing for indigenous Australians. Housing Studies, 15(4), 485–504.CrossRefGoogle Scholar
  37. Nuttall, D., Goldstein, H., Prosser, R., & Rasbash, J. (1989). Differential school effectiveness. International Journal of Educational Research, 13, 769–776.CrossRefGoogle Scholar
  38. OECD. (2011). Housing conditions. In How’s life? Measuring well-being. OECD Publishing. Google Scholar
  39. Pahl, J. (1983). The allocation of money and the structuring of inequality within marriage. The Sociological Review, 31(2), 237–262.CrossRefGoogle Scholar
  40. Pevalin, D., Taylor, M., & Todd, J. (2008). The dynamics of unhealthy housing in the UK: A panel data analysis. Housing Studies, 23(5), 679–695.CrossRefGoogle Scholar
  41. Robinson, J., & Godbey, G. (1997). The surprising ways americans use their time. University Park: Pennsylvania State University Press.Google Scholar
  42. Rohe, W. M., & Basolo, V. (1997). Long-term effects of homeownership on the self-perceptions and social interaction of low-income persons. Environment and Behavior, 29(6), 793–819.CrossRefGoogle Scholar
  43. Tabachnick, B. G., & Fidell, L. S. (2001). Using multivariate statistics (4th ed.). Sydney: Allyn and Bacon.Google Scholar
  44. Taylor, M., Pevalin, D., & Todd, J. (2007). Psychological costs of unsustainable housing commitments. Psychological Medicine, 37, 1027–1039.CrossRefGoogle Scholar
  45. Tomaszewski, W., Meiklejohn, C., Smith, A., & Haynes, M. (2013) Residential mobility in later life and its links with housing conditions and wellbeing of older people. In 7th Australasian housing researchers’ conference.Google Scholar
  46. Vera-Toscano, E., & Ateca-Amestoy, V. (2008). The relevance of social interactions on housing satisfaction. Social Indicators Research, 86(2), 257–274.CrossRefGoogle Scholar
  47. Waldron, S. (2010). Measuring subjective wellbeing in the UK. ONS working paper, Newport: ONS.Google Scholar
  48. Weidemann, S., & Anderson, J. (1985). A conceptual framework for residential satisfaction. In I. Altman & C. Werner (Eds.), Home environments. New York: Plenum.Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  1. 1.Institute for Social Science Research, School of Social ScienceThe University of QueenslandSt. LuciaAustralia
  2. 2.Institute for Social Science Research, School of Social ScienceThe University of QueenslandSt. LuciaAustralia

Personalised recommendations