Are Australians happier now than a year ago?

According to the latest Sensis consumer report 32% of us are ‘more stressed’ than we were a year ago, and 22% of us are ‘less stressed’, creating an overall trend toward greater stress. On the other hand, 28% of respondents in the Sensis survey report being happier than they were last year, while only half that proportion, 14%, felt less happy than twelve months ago.

But as Daniel Gilbert argues in his book Stumbling on Happiness, we are very bad at remembering our past emotional states. When researchers keep contemporaneous records of how people feel, and then ask them how they felt at earlier points in time, the respondents often misreport their own previous state of mind. This, he argues, is because rather than using direct recall of our emotions we use theories of how we would feel in particular circumstances, which are often wrong or neglect factors that would have affected us at the time.

The Sensis survey also asked its respondents why they felt less or more stressed or less or more happy, and we can see here mostly plausible theories as to why they may feel differently to a year ago. Leading the stress factors is a ‘heavier workload’, followed by ‘financial concerns’, a rather catch-all ‘everyday life’, and ‘more study’. It might be the case that these things have actually caused more stress, but also that because we are working harder, or facing high interest and petrol bills, we assume that we must be more stressed than we were before.

For the question on happiness, it seems to be that while more money is a minor factor explaining why people think they are happier than a year ago (9% ‘better financially’ perhaps plus 15% ‘new job/promotion’, though there other reasons beside money for a new job improving happiness), it is a big factor explaining why people feel less happy than twelve months ago (25% ‘cost of living’, 12% ‘financial worries’, 11% ‘petrol prices’, or nearly half – 48% – of all nominated reasons). This could be because of loss aversion, our tendency to feel losses more intensely than gains. But it could also be that in identifiying what has changed over the last year some respondents note their added financial pressures and assume that these have made them less happy than in the past.

Without keeping records of particular respondents it is hard to sort out exactly what’s going on here, but the large discrepancy between those who say they are happier and those who say they are less happy is a little suspicious, given what else we know about subjective well-being measures.

Subjective well-being tends to be quite stable over time at the population level – that is, the averages will be very similar from survey to survey. For example, in the Australian Unity Well-being Index (pdf) it varied through 14 surveys only by 3.1 points on a 0-100 range, and usually no more than 1 point survey-to-survey. In the HILDA survey, which does actually track the same respondents, their annual report (pdf) indicates that through three surveys the life satisfaction average varied by .1 on a 0-10 scale. So while about a quarter of respondents did show a significant shift in life satisfaction over a 12 month period, the ups and downs tend to cancel each other out to get the same average. The Sensis result would seem to suggest that ups significantly outnumber downs, pushing average happiness up. It could be that this is in fact the case, that the last 12 months have been a good year. But memory playing tricks is also a likely explanation.