Life Satisfaction in Australia: Evidence from Ten Years of the HILDA Survey

Abstract

Employing data from the Household, Income and Labour Dynamics in Australia survey, this paper examines the level, determinants and distribution of self-reported life satisfaction, as well as the prevalence and severity of dissatisfaction in Australia over the period 2001–2010. Against most objective measures Australia’s economic performance during this period was exemplary. Yet our results indicate a steady decline in life satisfaction from 2003 onwards, as well as a diminishing gap between the life satisfaction of males and females. Results also suggest that inequality in life satisfaction has generally declined. Geographic heterogeneity in the distribution of life satisfaction is apparent, and a number of socio-economic and demographic factors are found to serve an important role in determining an individual’s level of life satisfaction. Measures of the extent of dissatisfaction reveal an encouraging downward trend and provide policy makers with an alternative perspective from which to assess societal welfare.

This is a preview of subscription content, access via your institution.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7
Fig. 8

Notes

  1. 1.

    Gross National Income growth rates are calculated from figures converted to international dollars using purchasing power parity rates. Household final consumption expenditure is measured in constant 2000 USD. For further information see http://data.worldbank.org/?display=default.

  2. 2.

    A statistical division is an Australian Standard Geographical Classification defined area. Statistical divisions represent relatively homogenous regions characterised by identifiable social and economic links between the inhabitants and between the economic units with the region, under the unifying influence of one or more major town or city. Statistical divisions cover, in aggregate, the whole of Australia without gaps or overlaps. They do not cross State or Territory boundaries (Australian Bureau of Statistics 2011a).

  3. 3.

    This initial increase in the mean self-reported life satisfaction reflects the estimated panel conditioning effects, it not found in either the unadjusted estimates or the estimates employing a linear adjustment.

  4. 4.

    We take advantage of Mark Schaffer and Steven Stillman’s Stata user written command xtoverid. This is downloadable from the Statistical Software Components Archive using the Stata command "ssc install xtoverid".

  5. 5.

    We calculate the per cent maximum standard deviation employing a Stata program created by Ulrich Kohler. This is downloadable from the Statistical Software Components Archive using the Stata command “ssc install sdlim”.

References

  1. Alesina, A., Di Tella, R., & MacCulloch, R. (2004). Inequality and happiness: Are Europeans and Americans different? Journal of Public Economics, 88(9–10), 2009–2042.

    Article  Google Scholar 

  2. Ambrey, C., & Fleming, C. (2011). Valuing scenic amenity using life satisfaction data. Ecological Economics, 72(1), 106–115.

    Article  Google Scholar 

  3. Ambrey, C., & Fleming, C. (in press). Valuing ecosystem diversity in South East Queensland: A life satisfaction approach. Social Indicators Research, doi:10.1007/s11205-012-0208-4.

  4. Australian Bureau of Statistics. (2011a). Glossary of statistical geography terminology, 2011, Catalogue No. 1217.0.55.001. http://www.abs.gov.au/ausstats/abs@.nsf/mf/1217.0.55.001. Accessed 12 April 2012.

  5. Australian Bureau of Statistics. (2011b). Household income and income distribution, Catalogue No. 6523.0. http://www.abs.gov.au/ausstats/abs@.nsf/mf/6523.0. Accessed 1 March 2012.

  6. Australian Bureau of Statistics. (2011c). Measures of Australia’s progress: Summary indicators 2011, Catalogue No. 1370.0.55.001. http://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/1370.0.55.001. Accessed 17 July 2012.

  7. Australian Bureau of Statistics. (2012). 2011 Census of population and housing: Aboriginal and Torres Strait Islander peoples (indigenous) profile, Catalogue No. 2002.0. http://www.censusdata.abs.gov.au/census_services/getproduct/census/2011/communityprofile/0. Accessed 9 August 2012.

  8. Baron, J., & Cobb-Clark, D. (2010). Occupational segregation and the gender wage gap in private- and public-sector employment: A distributional analysis. Economic Record, 86(273), 227–246.

    Article  Google Scholar 

  9. Blanchflower, D., & Oswald, A. (2004). Well-being over time in Britain and the USA. Journal of Public Economics, 88(7–8), 1359–1386.

    Article  Google Scholar 

  10. Blanchflower, D., & Oswald, A. (2005). Happiness and the Human Development Index: The paradox of Australia. The Australian Economic Review, 38(3), 307–318.

    Article  Google Scholar 

  11. Boes, S., & Winkelmann, R. (2010). The effect of income on general life satisfaction and dissatisfaction. Social Indicators Research, 95(1), 111–128.

    Article  Google Scholar 

  12. Brereton, F., Clinch, J. P., & Ferreira, S. (2008). Happiness, geography and the environment. Ecological Economics, 65(2), 386–396.

    Article  Google Scholar 

  13. Breusch, T., & Pagan, A. (1979). A simple test for heteroscedasticity and random coefficient variation. Econometrica, 47(5), 1287–1294.

    Article  Google Scholar 

  14. Clark, A., Frijters, P., & Shields, M. (2008). Relative income, happiness, and utility: An explanation for the Easterlin paradox and other puzzles. Journal of Economic Literature, 46(1), 95–144.

    Article  Google Scholar 

  15. Cobb-Clark, D., & Schurer, S. (2012). The stability of big-five personality traits. Economic Letters, 115(1), 11–15.

    Article  Google Scholar 

  16. Delhey, J., & Kohler, U. (2011). Is happiness inequality immune to income inequality? New evidence through instrument-effect-corrected standard deviations. Social Science Research, 40(3), 742–756.

    Article  Google Scholar 

  17. Delhey, J., & Kohler, U. (2012). Happiness inequality: Adding meaning to numbers—A reply to Veenhoven and Kalmijn. Social Science Research, 41(3), 731–734.

    Article  Google Scholar 

  18. DeNeve, K., & Cooper, H. (1998). The happy personality: A meta-analysis of 137 personality traits and subjective well-being. Psychological Bulletin, 124(2), 197–229.

    Article  Google Scholar 

  19. Di Tella, R., MacCulloch, R., & Oswald, A. (2001). Preferences over inflation and unemployment: Evidence from surveys of happiness. American Economic Review, 91(1), 335–341.

    Article  Google Scholar 

  20. Di Tella, R., MacCulloch, R., & Oswald, A. (2003). The macroeconomics of happiness. The Review of Economics and Statistics, 85(4), 809–827.

    Article  Google Scholar 

  21. Dworkin, R. (1981). What is equality? Part 2: Equality of resources. Philosophy & Public Affairs, 10(4), 283–345.

    Google Scholar 

  22. Easterlin, R. (1974). Does economic growth improve the human lot? Some empirical evidence. In P. David & M. Redler (Eds.), Nations and households in economic growth: Essays in honor of Moses Abramovitz (pp. 89–125). New York: Academic Press.

    Google Scholar 

  23. Easterlin, R. (1995). Will raising the incomes of all increase the happiness of all? Journal of Economic Behavior & Organization, 27(1), 35–47.

    Article  Google Scholar 

  24. Easterlin, R. (2010). Well-being, front and center: A note on the Sarkozy report. Population and Development Review, 36(1), 119–124.

    Article  Google Scholar 

  25. Ferrante, F. (2009). Education, aspirations and life satisfaction. Kyklos, 62(4), 542–562.

    Article  Google Scholar 

  26. Ferrer-i-Carbonell, A. (2005). Income and well-being: An empirical analysis of the comparison income effect. Journal of Public Economics, 89(5–6), 997–1019.

    Article  Google Scholar 

  27. Ferrer-i-Carbonell, A., & Frijters, P. (2004). How important is methodology for the estimates of the determinants of happiness? Economic Journal, 114(497), 641–659.

    Article  Google Scholar 

  28. Frey, B., & Stutzer, A. (2002). What can economists learn from happiness research? Journal of Economic Literature, 40(2), 402–435.

    Article  Google Scholar 

  29. Frijters, P., Haisken-DeNew, J., & Shields, M. (2004). Money does matter! Evidence from increasing real income and life satisfaction in East Germany following reunification. American Economic Review, 94(3), 730–740.

    Article  Google Scholar 

  30. Gandelman, N., & Porzecanski, R. (in press). Happiness inequality: How much is reasonable? Social Indicators Research. doi:10.1007/s11205-011-9929-z.

  31. Geishecker, I., & Riedl, M. (2010). Ordered response models and non-random personalty traits: Monte Carlo simulations and a practical guide. Germany: Centre for European Governance and Economic Development Research.

    Google Scholar 

  32. Hamilton, C., Downie, C., & Lu, Y.-H. (2008). The state of the Australian middle class. Australasian Accounting Business and Finance Journal, 2(3), 1–25.

    Google Scholar 

  33. Headey, B., Muffels, R., & Wagner, G. (in press). Choices which change life satisfaction: Similar results for Australia, Britain and Germany. Social Indicators Research. doi:10.1007/s11205-012-0079-8.

  34. Helliwell, J. (2003). How’s life? Combining individual and national variables to explain subjective well-being. Economic Modelling, 20(2), 331–360.

    Article  Google Scholar 

  35. Hill, R. C., Griffiths, W., & Lim, G. (2008). Principles of Econometrics (3rd ed.). New Jersey: John Wiley & Sons.

    Google Scholar 

  36. Kahneman, D., & Krueger, A. (2006). Developments in the measurement of subjective well-being. Journal of Economic Perspectives, 20(1), 3–24.

    Article  Google Scholar 

  37. Kalmijn, W. (2012). Happiness is not normally distributed: A comment to Delhey and Kohler. Social Science Research, 41(1), 199–202.

    Article  Google Scholar 

  38. Kalmijn, W., & Veenhoven, R. (2005). Measuring inequality of happiness in nations: In search for proper statistics. Journal of Happiness Studies, 6(4), 357–396.

    Article  Google Scholar 

  39. Kroll, C. (2011). Different things make different people happy: Examining social capital and subjective well-being by gender and parental status. Social Indicators Research, 104(1), 157–177.

    Article  Google Scholar 

  40. Leigh, A. (2010). Disconnected. Sydney: University of New South Wales Press.

    Google Scholar 

  41. Leigh, A., & Wolfers, J. (2006). Happiness and the Human Development Index: Australia is not a paradox. The Australian Economic Review, 39(2), 176–184.

    Article  Google Scholar 

  42. MacKerron, G. (2012). Happiness economics from 35 000 feet. Journal of Economic Surveys, 26(4), 705–735.

    Article  Google Scholar 

  43. Margolis, R., & Myrskylä, M. (2011). A global perspective on happiness and fertility. Population and Development Review, 37(1), 29–56.

    Article  Google Scholar 

  44. Oswald, A. (1997). Happiness and economic performance. Economic Journal, 107(445), 1815–1831.

    Article  Google Scholar 

  45. Ott, J. (2010). Greater happiness for a greater number: Some non-controversial options for governments. Journal of Happiness Studies, 11, 631–647.

    Article  Google Scholar 

  46. Ott, J. (2011). Government and happiness in 130 nations: Good governance fosters higher level and more equality of happiness. Social Indicators Research, 102(1), 3–22.

    Article  Google Scholar 

  47. Rawls, J. (1971). A theory of justice. Cambridge, MA: Oxford University Press.

    Google Scholar 

  48. Sarason, I., Levine, H., Basham, R., & Sarason, B. (1983). Assessing social support: The Social Support Questionnaire. Journal of Personality and Social Psychology, 44(1), 127–139.

    Article  Google Scholar 

  49. Saucier, G. (1994). Mini-markers: A brief version of Goldberg’s unipolar Big-Five markers. Journal of Personality Assessment, 63(3), 506–516.

    Article  Google Scholar 

  50. Schubert, C. (2012). Pursuing happiness. Kyklos, 65(2), 245–261.

    Article  Google Scholar 

  51. Schwartz, B., Ward, A., Monterosso, J., Lyubomirsky, S., White, K., & Lehman, D. (2002). Maximizing versus satisficing: Happiness is a matter of choice. Journal of Personality and Social Psychology, 83(5), 1178–1197.

    Article  Google Scholar 

  52. Senik, C. (2009). Income distribution and subjective happiness: A survey. OECD Social, Employment and Migration Working Papers No. 96. Paris.

  53. Shields, M., Price, S., & Wooden, M. (2009). Life satisfaction and the economic and social characteristics of neighbourhoods. Journal of Population Economics, 22(2), 421–443.

    Article  Google Scholar 

  54. Skinner, N., Hutchinson, C., & Pocock, B. (2012). The big squeeze: Work, home and care in 2012. Adelaide: Centre for Work+Life.

    Google Scholar 

  55. Smyth, R., Mishra, V., & Qian, X. (2008). The environment and well-being in urban China. Ecological Economics, 68(1–2), 547–555.

    Article  Google Scholar 

  56. Sortino, F. (2010). The sortino framework for constructing portfolios: Focusing on desired target return to optimize upside potential relative to downside risk. Boston: Elsevier.

    Google Scholar 

  57. Stevenson, B., & Wolfers, J. (2008). Happiness inequality in the United States. Journal of Legal Studies, 37(s2), s33–s79.

    Article  Google Scholar 

  58. Stevenson, B., & Wolfers, J. (2009). The paradox of declining female happiness. American Economic Journal: Economic Policy, 1(2), 190–225.

    Google Scholar 

  59. Stiglitz, J., Sen, A., & Fitoussi, J.-P. (2009). Report by the commission on the measurement of economic performance and social progress. Paris.

  60. The World Bank. (2012). Data. Available: http://data.worldbank.org/?display=default. http://data.worldbank.org/?display=default. Accessed 2 August 2012.

  61. Tiebout, C. (1956). A pure theory of local expenditures. Journal of Political Economy, 64(5), 416–424.

    Article  Google Scholar 

  62. United Nations Development Programme. (2010). Human development report 2010: The Real Wealth of Nations (Pathways to Human Development). New York.

  63. van Egmond, M., Baxter, J., Buchler, S., & Western, M. (2010). A stalled revolution? Gender role attitudes in Australia, 1986–2005. Journal of Population Research, 27(3), 147–168.

    Article  Google Scholar 

  64. van Praag, B., Frijters, P., & Ferrer-i-Carbonell, A. (2003). The anatomy of subjective well-being. Journal of Economic Behavior & Organization, 51(1), 29–49.

    Article  Google Scholar 

  65. Veenhoven, R. (1996). Developments in satisfaction research. Social Indicators Research, 37(1), 1–46.

    Article  Google Scholar 

  66. Veenhoven, R. (2005). Return of inequality in modern society? Test by dispersion of life-satisfaction across time and nations. Journal of Happiness Studies, 6(4), 457–487.

    Article  Google Scholar 

  67. Veenhoven, R. (2012). The medicine is worse than the disease: Comment on Delhey and Kohler’s proposal to measure inequality in happiness using ‘instrument-effect-corrected’ standard deviation. Social Science Research, 41(1), 203–205.

    Article  Google Scholar 

  68. Watson, N., & Wooden, M. (2002). The household, income and labour dynamics in Australia (HILDA) survey: Wave 1 survey methodology. HILDA Project Technical Paper Series No. 1/02. Melbourne: Melbourne Institute of Applied Economic and Social Research.

  69. Watson, N., & Wooden, M. (2004a). Assessing the quality of the HILDA survey wave 2 data. HILDA Project Technical Paper Series No. 5/04. Melbourne: Melbourne Institute of Applied Economic and Social Research.

  70. Watson, N., & Wooden, M. (2004b). Sample attrition in the HILDA survey. Australian Journal of Labour Economics, 7(2), 293–308.

    Google Scholar 

  71. Watson, N., & Wooden, M. (2012). The HILDA survey: A case study in the design and development of a successful household panel study. Longitudinal and Life Course Studies, 3(3), 369–381.

    Google Scholar 

  72. Wellman, B., & Wortley, S. (1990). Different strokes from different folks: Community ties and social support. American Journal of Sociology, 96(3), 558–588.

    Article  Google Scholar 

  73. Welsch, H. (2007). Macroeconomics and life satisfaction: Revisiting the “Misery Index”. Journal of Applied Economics, 10(2), 237–251.

    Google Scholar 

  74. Winkelmann, R. (2009). Unemployment, social capital, and subjective well-being. Journal of Happiness Studies, 10(4), 421–430.

    Article  Google Scholar 

  75. World Bank (2012). Worldwide Governance Indicators. http://info.worldbank.org/governance/wgi/index.asp. Accessed 19 December 2012.

Download references

Acknowledgments

We thank Griffith University for the Griffith University Postgraduate Research Scholarship and the Griffith Business School for the Griffith Business School Top-up Scholarship; funding that was instrumental in facilitating this research. This research would not have been possible without data provided by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA). Revisions to this paper were made while Christopher Fleming was a visiting researcher at the University of Stirling; we thank staff for their support. We also thank an anonymous reviewer for feedback on an earlier draft.

Author information

Affiliations

Authors

Corresponding author

Correspondence to Christopher M. Fleming.

Additional information

This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) survey. The HILDA project was initiated and is funded by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to either FaHCSIA or the Melbourne Institute.

Appendix

Appendix

See Table 3.

Table 3 Additional results

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Ambrey, C.L., Fleming, C.M. Life Satisfaction in Australia: Evidence from Ten Years of the HILDA Survey. Soc Indic Res 115, 691–714 (2014). https://doi.org/10.1007/s11205-012-0228-0

Download citation

Keywords

  • Dissatisfaction
  • Happiness
  • Household, Income and Labour Dynamics in Australia (HILDA)
  • Inequality
  • Life satisfaction