Blog number 53,800,001

September 13, 2006 ~ Andrew Norton ~ 33 Comments

Technorati claims to be tracking 53.8 million blogs, so I am not exactly a trendsetter in establishing my own blog. But through my years at Catallaxy I can make some claim to be a veteran Australian blogger, and I hope some of the people who read me there might read me here – and that my pro-civility comments policy will encourage ‘lurkers’ who were put off commenting there by the less-than-perfect manners of a few of the regulars to do so here. Aside from that, I expect my posts here to be similar in subject and style to my Catallaxy posts. There are a couple below, one of which is an updated version of a guest post I wrote at Stephen Kirchner’s Institutional Economics.

I’m still struggling with the technology – I have already seen more than my fair share of ‘500 internal server error’ (whatever that means) messages – and haven’t figured out how to get the comments sidebar going. But I hope the site’s appearance will improve over time.

Are Australians happier now than a year ago?

September 13, 2006 ~ Andrew Norton ~ 3 Comments

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.

The political health of the Medibank Private sale

September 13, 2006 ~ Andrew Norton ~ 12 Comments

Despite its name, Medibank Private is owned by the Australian government, which wants to sell it – though not now until after the election.

One thing we can be sure of, though, is that public opinion won’t support it. In the 1980s, there was some popular support for privatisation, but it went into decline after major privatisations began in the early 1990s. Asked at an abstract level in 2005 (in the Australian Survey of Social Attitudes) whether privatisation brought more benefits than costs, 53% disagreed and 17.5% agreed. On more specific privatisations, some of the ‘don’t know’ respondents say ‘no’, with about two-thirds typically against the two main recent sale proposals, Telstra and Medibank Private. This was seen again in an ACNielsen poll published in yesterday’s Fairfax broadsheets, with 63% against selling Medibank Private off and 17% in favour. Newspoll recorded almost the same result back in April.

Politically, I believe that marketisation and privatisation are contrary agendas – though in a policy sense they are synergistic agendas. The pragmatic Australian electorate wants reliable, cheap services, and as I argued last year in Telstra’s case if things are broadly ok people will stick with the safe status quo. Telstra’s service levels have improved significantly since the telecommunications market was opened up, and so removed the ‘do something, anything’ frustrations that were probably driving pro-privatisation opinion. Similarly, Medibank Private operates in a competitive market already so it is hard to see how privatisation will create any significant consumer benefits, and indeed as the Newspoll found most people think premiums would rise if it was privatised (though in reality competitive conditions in the industry will be the main determinant of prices).

The government isn’t likely to win this debate, but far more significant privatisations than Medibank Private have proceeded without obvious political cost, so they may as well take the cash from a sale if and when they can.