Do more people feel better off now than when Howard was elected?

According to an article in this week’s Bulletin, more people (36.5%) feel that they are not better off than before John Howard was elected PM than feel that they are better off (32.6%). The question seems to have been badly worded, with the apparent options being ‘yes’, ‘no’ and ‘the same’ – the magazine interpreted ‘no’ as ‘worse off’, but without spelling this out clearly some people who think things haven’t changed much could have answered ‘no’.

Even so, only a third thinking they are better off seems low. Income distribution analysis suggests that the benefits of prosperity have been spread through all socio-economic groups. And it’s been a good eleven years for technology-driven improvements: the internet and mobile phones particularly, but also home entertainment. Unemployment is at a 30-year low, and workforce participation at an all-time high.

There are theories that explain why perceptions lag objective statistics on issues like this, particularly when the question asks the respondent whether he or she feels better off. The happiness research has made much of the process of adaptation. When our objective standard of living improves we feel better for a while, but after a while we get used to it. Psychologists such as Danny Gilbert argue that we are not very good at recalling past emotional states. But Gilbert’s theory also suggests that because we can’t remember how we felt, we use theories of how we would have felt instead. Do people’s ‘theories’ of 1996 suggest that things were better then than now?
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