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Choices Which Change Life Satisfaction: Similar Results for Australia, Britain and Germany

Abstract

Using data from national socio-economic panel surveys in Australia, Britain and Germany, this paper analyzes the effects of individual preferences and choices on subjective well-being (SWB). It is shown that, in all three countries, preferences and choices relating to life goals/values, partner’s personality, hours of work, social participation and healthy lifestyle have substantial and similar effects on life satisfaction. The results have negative implications for a widely accepted theory of SWB, set-point theory. This theory holds that adult SWB is stable in the medium and long term, although temporary fluctuations occur due to life events. Set-point theory has come under increasing criticism in recent years, primarily due to unmistakable evidence in the German Socio-Economic Panel that, during the last 25 years, over a third of the population has recorded substantial and apparently permanent changes in life satisfaction (Fujita and Diener in J Pers Soc Psychol 88:158–64, 2005; Headey in Soc Indic Res 85:389–403, 2008a; Headey et al. in Proc Natl Acad Sci USA 107(42):17922–17926, 2010). It is becoming clear that the main challenge now for SWB researchers is to develop new explanations which can account for medium and long term change, and not merely stability in SWB. Set-point theory is limited precisely because it is purely a theory of stability. The paper is based on specially constructed panel survey files in which data are divided into multi-year periods in order to facilitate analysis of medium and long term change.

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Notes

  1. Even this degree of stability might not hold in a country with a more turbulent recent history. In the periods in question none of these countries experienced a major war, nor a major economic recession.

  2. See also Hirsch (1976) and Frank (1985) who make a similar distinction between positional and non-positional goods.

  3. The CNEF can be obtained from Cornell University at www.human.cornell.edu\pam\research\centers-program/…/cnef.cfm.

  4. Even the short version of the scale released by Psychological Assessment Resources has 60 items; 12 items per trait (Costa and McCrae 1991).

  5. Ten items were included in 1990, 1992 and 1995 and then nine in 2004 and 2008. The item dropped in 2004 and 2008 related to the importance of having a wide circle of friends, which loaded on the pro-social factor.

  6. For each country response scales relating to social participation have been reversed so that a high score reflects high participation.

  7. The correlations have varied from year to year but are usually around 0.3.

  8. ‘Seldom’ or ‘never’ have been included as separate categories in more recent waves of SOEP.

  9. Many papers only include an age squared term. However, if it is hypothesized that satisfaction declines in middle age and then rises again in one’s senior years, then logically an age cubed term is required as well.

  10. An alternative hypothesis is that ‘unlike poles attract’ and that partners with contrasting personalities will get on better together and have higher SWB. This hypothesis was also tested and rejected via the partner similarity/difference scores constructed here.

  11. Consequently an annual measure of life satisfaction, rather than a 5- or 3-year average measure, serves as the dependent variable.

  12. In Australia the metric regression coefficient for obese women is −0.08 (p < 0.01), in Britain b = −0.21 (p < 0.001) and in Germany b = −0.21 (p < 0.01).

  13. In previous tables, dealing with personality traits and life goals, assumptions required for a fixed effects model were not met. Personality traits have only been measured once in SOEP, and life goals on only a few occasions and at uneven intervals.

  14. The same exceptions apply as in Table 3: German women appear not to mind being overworked and British women do not mind being underworked. Also, in the case of British men, there is no significant link between changes in social participation and changes in life satisfaction (although the coefficient is positive).

  15. These benchmark assessments are made on the basis of re-running analyses with standardized variables and coefficients (Betas). That is, variables were rescaled to have means of zero and standard deviations of one. Rough comparisons can then be made between the effect sizes of regression coefficients, because they have all had the same metric imposed.

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Acknowledgments

We would like to thank Ed Diener of the University of Illinois, Daniel Kahneman of Princeton University, Andrew Oswald of Warwick University and Alexander Wearing of Melbourne University for insightful comments on an earlier version of this paper.

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Correspondence to Bruce Headey.

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Headey, B., Muffels, R. & Wagner, G.G. Choices Which Change Life Satisfaction: Similar Results for Australia, Britain and Germany. Soc Indic Res 112, 725–748 (2013). https://doi.org/10.1007/s11205-012-0079-8

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Keywords

  • Set-point theory
  • Life goals/values
  • Individual choice
  • Panel regression analysis
  • BHPS
  • HILDA
  • SOEP