1301.0 - Year Book Australia, 2007  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 24/01/2007   
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Contents >> Health >> Article - Life satisfaction and measures of progress


Measuring a nation's progress is one of the most important tasks that a national statistical agency can take on. For over 100 years, the Australian Bureau of Statistics (ABS) has been measuring Australia's progress through the multitude of statistics published relating to Australia's economy, society and environment. However, for the most part, statistical publications have tended to focus on each of these three broad areas in isolation.

The ABS's Measures of Australia's Progress (1370.0) (MAP) was first published in 2002. It looks beyond the aggregate measure of economic activity, gross domestic product (GDP), which has traditionally been a key measure of national progress, and presents a suite of indicators relating to aspects of Australian life across the economy, the environment and society. Within these broad areas, dimensions of progress encompass national income, wealth and productivity, the quality of the environment, the wellbeing of the population in terms of health, education, work, housing and economic resources, and the way people live together in society.

More specifically, MAP presents 14 headline indicators across 14 headline dimensions of progress (some dimensions have more than one headline indicator while others have none). In addition, supplementary indicators are presented for the headline dimensions, and five supplementary dimensions of progress are included. The full suite of indicators provides the statistical evidence to allow the assessment of progress by readers - those who formulate and evaluate policy, researchers and the community.

While life satisfaction, or subjective wellbeing, has not been included in MAP as a dimension of progress, there is increasing interest in this area - to enable subjective aspects of wellbeing to be considered alongside the more traditional objective measures.


Some would argue that just as important as knowing whether aspects of life (such as health, education and economic growth) in Australia are improving, is knowing whether people actually feel that their wellbeing has improved, that is whether they are actually happier or more satisfied with their lives. In recent years there has been an interest in people's opinions and feelings about their lives and how this relates to an understanding of national wellbeing.

Progress is closely related to the concept of wellbeing, with the idea that enhanced population wellbeing is one of the outcomes of improving life in Australia. The indicators presented in MAP tend to focus on the more objective elements of wellbeing, that is the conditions and aspects of people's lives and the society they live in. Public policy tends to be aimed at improving or enhancing these conditions. However, improving particular living conditions will not necessarily make a person happier or more satisfied, as people place greater or lesser importance on different aspects of their lives (and on life in Australia generally) and in many instances these aspects are in competition with one another.

The ABS collected some information on people's overall life satisfaction in the 2001 National Health Survey (NHS). When asked about how they felt about their lives as a whole, 76% of Australian adults indicated they were delighted, pleased or mostly satisfied with their lives. Less than 6% of people indicated that they felt mostly dissatisfied, unhappy or terrible about their lives (graph S9.1).


There is no established long-term time series of life satisfaction (or happiness) statistics in Australia, although findings from various surveys conducted since the 1950s have produced results within a fairly narrow range, that is average life satisfaction of around 6.5 to 7.5 on a scale of one to ten, indicating general satisfaction with their lives. This is despite the many changes in the social, economic and environmental conditions of Australian's lives during these decades. Surveys in other Western countries have produced similar results. For these reasons, many researchers in this area agree that measures of overall life satisfaction and happiness are most useful when analysed in conjunction with other data about people's quality of life or life circumstances.

There are still many challenges in understanding the nature and quality of these life satisfaction measures and how they relate to the social and economic conditions and outcomes which shape Australian life. For these reasons, it is not clear, as yet, that any particular measure of life satisfaction would meet the criteria for inclusion as an indicator of progress in MAP. However, the ABS acknowledges that there is growing interest in life satisfaction (or happiness) as an important aspect of life in Australia. The following sections outline some of the recent research into life satisfaction and the issues associated with its measurement so that readers can consider how Australians' feelings about their lives might relate to the picture of progress.


Notions of happiness and life satisfaction are concerns for a wide range of disciplines, including economics, psychology, sociology, neuroscience and public policy. Psychologists often distinguish between the two concepts, with happiness relating to the more temporal concept of positive affect (i.e. positive mood, feelings of pleasure, joy, etc.) and life satisfaction constituting the more cognitive concept of an individuals' appraisal of his or her life situation overall - the totality of pleasures and pains, or quality of life. Life satisfaction and happiness both fall under the umbrella term 'subjective wellbeing' which relates to the way people feel about their lives. The term happiness is often used in a broader context (e.g. by economists in their discussion of 'utility') and in many fields, data on happiness and life satisfaction are used interchangeably, as are the terms themselves.

The most common method used to measure life satisfaction has been the use of survey questions asking people to report on their perceived levels of life satisfaction, for example, being asked questions such as 'All things considered, how satisfied are you with your life as a whole these days?'. Respondents are given a scale of between two and ten points against which to rate their level of satisfaction. In the 2001 NHS, the ABS used a seven-point scale with responses ranging from 'delighted' to 'terrible'. Some studies into life satisfaction ask people questions about whether they believe that circumstances have or will improve. Others focus on people's level of satisfaction with particular aspects of their lives (such as work or family life) or with aspects of the society in which they live (such as the economy or the state of the environment).


Several characteristics of general human behaviour are believed to influence our sense of wellbeing. All of these characteristics have a regulatory effect on life-satisfaction levels (although this operates in very different ways for each) and, therefore, impact on the way data on life satisfaction can be interpreted and related to other aspects of people's lives, such as their social and economic circumstances. These are:
  • A natural tendency to feel good about ourselves and our lives

    While a person's happiness levels can fluctuate over time in response to changing circumstances, trauma or crises, there is a tendency for levels of overall life satisfaction in Western countries to return to a fairly narrow range clustered around 70 on a 100-point scale.
  • The ability to adapt to our circumstances, be they good or bad

    Just as our bodies can make physiological adjustments to things like heat or cold, it is believed that we adjust psychologically to both good or bad events so that we do not remain in a state of elation or despair. For example, studies in the 1970s and 1980s found that winning the lottery or suffering a spinal cord injury resulting in paraplegia or quadriplegia, did not significantly impact on people's levels of happiness over time. While the ability to adapt varies between individuals, it has also been found that, on average, some circumstances take longer to adapt to than others.
  • The tendency to compare ourselves with others, with our past circumstances, with our own aspirations, or some other benchmark

    This relates to the way that people make such comparisons and then judge their own wellbeing. If these comparisons favour an individual, they are more likely to express higher levels of life satisfaction than if the comparison is an unfavourable one. A particular level of income may contribute to the satisfaction of someone who is well-off relative to those around them, but not to someone who is earning less than those around him or her.
  • The ability to make trade-offs

    As well as the ability to adjust our expectations to our circumstances or level of resources, people have the ability to change their preferences and/or the priorities they place on various aspects of their lives.


What one person feels is important may not be so for someone else. This individual nature of life satisfaction contributes to many of the difficulties associated with its measurement, the ability to interpret measures, and the use of the findings to improve overall wellbeing at the societal level.

Analyses of the relationship between life satisfaction and various demographic, social and economic variables suggest that in many cases the relationship is not strong. Certain personality traits have been found to be strongly associated with high levels of life satisfaction or general happiness. Research (predominantly in the field of psychology) on the relationship between life satisfaction and individual characteristics has found the following are positively correlated with high levels of self-reported life satisfaction:
  • extroversion
  • optimism, adaptability
  • high self-esteem
  • the ability to set compatible goals and progress towards them
  • the ability to understand and interpret the world
  • a sense of meaning in life (or spirituality)
  • a sense of personal control.

At the other end of the spectrum, neuroticism (or a tendency to worry) has been found to have a negative relationship with life satisfaction.


While estimated levels of life satisfaction and happiness across the population have not changed greatly in many of the wealthier developed nations since the 1950s, these countries have sustained strong economic growth over the period. For example, in the United States of America, while measures of life satisfaction have remained around 70%, real GDP per person has more than doubled over the same period.

One major area of research in this area has been the comparison of levels of wellbeing and happiness across nations. Initiatives such as the World Bank's Human Development Index are designed to provide information on how quality of life differs across nations (with a view to improving it - particularly for developing nations), using a small set of data about the conditions of life in each nation. Other initiatives, such as the World Values Survey and the World Database of Happiness, attempt to provide an alternative view of wellbeing by focusing on subjective measures.

People from different cultures bring different meaning to the notions of life satisfaction and happiness based on differing cultural values, structures, histories and circumstances. This, combined with the individual nature of life satisfaction, are factors which should be considered when interpreting international comparisons of life satisfaction. Differences in survey conditions, methodologies, and response rates will also influence the reliability and interpretation of results.

The Erasmus University of Rotterdam's World Database of Happiness contains data on life satisfaction for 90 nations. These data have been collected at different times using a variety of survey methodologies. Overall life satisfaction scores collected from these countries in the 1990s ranged from 3.2 to 8.0 on a scale of one to ten. Australia's average score of 7.3 was among the highest scores. Countries such as the United Kingdom, New Zealand and the United States of America all have very similar levels of life satisfaction to Australia. There was a tendency for poorer countries to report lower levels of life satisfaction, and for levels to be higher as income increased (as measured by GDP per person, purchasing power parity), for levels up to US$15,000. Across countries where GDP per person exceeded this, satisfaction levels tended to be broadly similar.

A 1996 analysis of these measurements from the 1990s and other data relating to 48 countries found a range of characteristics were associated with high levels of life satisfaction. Examples of these included purchasing power, respect of civil rights, social participation, industrialisation, perceived freedom in life, literacy, tolerance, and participation in work. Conversely, characteristics associated with low levels of life satisfaction included high murder rates, lethal accidents, and incidence of corruption.


In the past few years, economists have increasingly looked beyond conventional measures of growth to the field of psychology and subjective concepts when considering wellbeing in society. However, the focus on happiness as it relates to utility in economic theory dates back to the 18th century, evolving from debates around the role of public policy in maximising utility across society as a whole. Utility was defined as people's ability to meet their needs, and optimise their wellbeing. Conventional analysis has focused on income, which in turn reflects consumption possibilities, as its main determinant.

In 2004, the Australian Government Department of the Treasury produced a Wellbeing Framework. The framework draws on the early utility-based welfare economic theory that maximising aggregate utility corresponds to maximising societal wellbeing. The Treasury's Wellbeing Framework comprises five dimensions:
  • the level of opportunity and freedom that people enjoy (i.e. the capacity to choose the lives they want to live)
  • the level of consumption possibilities (i.e. people's command over resources to obtain goods and services to satisfy their needs and wants)
  • the distribution of consumption possibilities (i.e. the spread of all aspects of consumption across the population, including across different groups in society, across different geographic regions and across generations)
  • the level of risk people are required to bear (which optimally should match their risk preferences)
  • the level of complexity people are required to deal with (with an emphasis on matching this to community preference so that opportunities are not limited by it).


In describing the social, economic and environmental aspects of Australian life, it is natural that many of the indicators included in MAP focus on particular aspects of life that are 'of fundamental and direct importance to human wellbeing'. Studies over the years have found that many social and economic characteristics are partially correlated with self-reported wellbeing. Some of these relationships are evident when looking at life satisfaction data collected in the 2001 NHS, specifically the proportion of people who reported that they were satisfied with their lives, that is, they indicated they were delighted, pleased or mostly satisfied with their lives. As noted earlier, on average, 76% of Australian adults fell into this category. The proportion of people who were satisfied with their lives remained above 70% across all age groups. More people in their 20s reported they were satisfied with their lives than for any other age group, while those aged between 35 and 64 years were less likely than average to indicate satisfaction with their lives. Those aged 85 years and over were the least likely of all age groups to indicate they were satisfied (71%) (graph S9.2).


Conventional economic analysis of wellbeing (or utility) often assumes level of income as the prime determinant of wellbeing for individuals within society. In MAP, low income is identified as a key indicator for economic hardship. Taking into account the age structures of different income groups, 64% of people in the low income group felt delighted, pleased or mostly satisfied with their lives in 2001, compared with 77% of people in the middle income group, and 86% of people in the high income group (graph S9.3).


The quality of a person's close relationships is one factor that most researchers agree has a fairly strong association with high levels of subjective wellbeing. In 2001, 81% of people who were married felt pleased or mostly satisfied with their lives compared with 63% of people who were separated or divorced. Across all living arrangements, lone parents and the adult children living with them were the people least likely to feel pleased or mostly satisfied with life (60% and 64% respectively) (table S9.4).

S9.4 PROPORTION OF PERSONS WHO WERE SATISFIED WITH THEIR LIVES(a)(b), By selected characteristics - 2001

Never married
Non-dependent child in couple family
Non-dependent child in one-parent family
Partner in couple, no children
Parents in couple families with children
Lone parents
Living alone
With a long-term health condition
No long-term health condition
With mental and behavioural problems
With high/very high levels of psychological distress
With a non-school qualification(c)
Without a non-school qualification(c)
Not in the labour force
All persons aged 18 years and over

(a) Persons who felt delighted, pleased or mostly satisfied with their lives.
(b) Age standardised.
(c) Non-school qualification refers to a vocational or higher education qualification.
Source: ABS data available on request, 2001 National Health Survey.

Participation, be it social, educational or in the workforce has also been associated with higher levels of life satisfaction. In 2001, people who were employed and those with a vocational or higher education qualification had higher than average life satisfaction levels. Conversely, people who were unemployed were considerably less likely than the population as a whole to report that they were pleased or mostly satisfied with their lives (56%).

The Australian Council for Educational Research Longitudinal Survey of Australian Youth, also collects information on the life satisfaction of Australia's young people. Between 1999 and 2002, the survey found that of a group of young people who had been in Year 9 in 1995, those who were involved in full-time work, study or combination of both activities equating to a full-time load, consistently reported higher levels of life satisfaction than those whose total participation equated to a part-time load, or those not participating at all.

Health is also a key dimension of progress for individuals. While a higher proportion of people without long-term health conditions indicated they were pleased or mostly satisfied with their lives (83%) in the 2001 NHS than those who had long-term conditions (75%), differences were more evident in relation to indicators of mental health. Unhappiness is a symptom of many mental health conditions and so it can be expected that the presence of mental illness would lead to a lowering of self-reported life satisfaction. In 2001, the proportion of people with mental and behavioural problems, and those with very high or high levels of psychological distress, who reported they felt pleased or mostly satisfied in life was below half - 46% and 34% respectively.


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