Love and money: non-linear moderators of subjective wellbeing

relevant to public policy

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Robert A. Cummins1

Anna L.D. Lau2

Jacqui Woerner1

Adele Gibson1

Adrian Tomyn1

Jenny Walter1

Lufanna Lai Ching1 James Collard1

1Australian Centre on Quality of Life, Deakin Universityhttp://www.deakin.edu.au/research/acqol

2Hong Kong Polytechnic University

Translation

High population SWB is desirable

Therefore, public policy should be directed to increasing population SWB

The best way to do this is through love and money

But the means are complicated by the fact that the relationships are non-linear

Positive emotions build a range of desirable characteristics as:

Physical resources (health, longevity)

Social resources (friendliness, social capital)

Intellectual resources (intellectual curiosity, expert knowledge)

Psychological resources (resilience, optimism, creativity)

Why is population happiness relevant to public policy?

“How satisfied are you with your -----?”

( SWB )

• Standard of living• Health• Achieving in life• Relationships• Safety• Community connectedness• Future security

Personal Wellbeing Index

How do we measure Subjective Wellbeing?

Our data are drawn from the Australian Unity Wellbeing Index

Surveys

Geographically representative sample

N = 2,000

Telephone interview

#1: April 2001

------------

#18: October 2007

Personal Wellbeing Index 2001 - 2007

87654321

SurveyDate

Major eventspreceding survey

>S11

>S2, S4, S5

Scores above this line aresignificantly higher than S1

72

73

74

75

76

77

S1

Apr 2

001

S2 Sep

t 200

1

S3 M

ar 2

002

S4 Aug

200

2

S5 Nov

200

2

S6 M

ar 2

003

S7 Ju

n 20

03

S8 Aug

200

3

S9 Nov

200

3

S10 F

eb 2

004

S11 M

ay 2

004

S12 A

ug 2

004

S13 M

ay 2

005

S14 O

ct 2

005

S15 M

ay 2

006

S16 O

ct 2

006

S17 A

pr 2

007

Strengthof

satisfaction

Key: 1 = September 11 2 = Bali Bombing 3 = Pre-Iraq War 4 = Hussein Deposed 5 = Athens Olympic 6 = Asian Tsunami 7 = Second Bali Bombing 8 = New Industrial Relations Laws

Personal Wellbeing Index 2001 - 2007

87654321

SurveyDate

Major eventspreceding survey

>S11

>S2, S4, S5

Scores above this line aresignificantly higher than S1

72

73

74

75

76

77

S1

Apr 2

001

S2 Sep

t 200

1

S3 M

ar 2

002

S4 Aug

200

2

S5 Nov

200

2

S6 M

ar 2

003

S7 Ju

n 20

03

S8 Aug

200

3

S9 Nov

200

3

S10 F

eb 2

004

S11 M

ay 2

004

S12 A

ug 2

004

S13 M

ay 2

005

S14 O

ct 2

005

S15 M

ay 2

006

S16 O

ct 2

006

S17 A

pr 2

007

Strengthof

satisfaction

Key: 1 = September 11 2 = Bali Bombing 3 = Pre-Iraq War 4 = Hussein Deposed 5 = Athens Olympic 6 = Asian Tsunami 7 = Second Bali Bombing 8 = New Industrial Relations Laws

This represents a 3.0 percentage point variation

Why is happiness held so steady?

Homeostasis

Just like we hold body temperature steady

Subjective wellbeing homeostasis

Homeostasis is maintained by using resources for defence

Badstuff

Subjective wellbeingX

Major external protective resources

(Money, Relationships)

Internal resources(eg. Finding meaning

for the bad event)

Money is a flexible resource that allows people to defend homeostasis and their happiness

Homeostasis can failOverwhelming

NegativeChallenges

Subjective wellbeing

The result of subjective wellbeing loss is depression

How can we use this knowledge to identify disadvantaged groups in Australia?

Their mean SWB can be examined against the normative range for group mean scores

SWB normative range for group mean scores in Australia

.

Normal range76.4

73.4

55

60

65

70

75

80

PWI

Group A

Group B

Group C

? ? ?

G x All others (2 x 36) 72A x All others (7 x 31) 217I x All others (7 x 31) 217HC x All others (5 x 33) 165RS x All others (6 x 32) 192ES x All others (11 x 27) 297G x A x I (2 x 7 x 7) 98G x A x HC (2 x 7 x 5) 70G x A x RS (2 x 7 x 6) 84G x A x ES (2 x 7 x 11) 154I x RS x ES (7 x 6 x 11) 462G x I x ES (2 x 7 x 11) 154HC x RS x I (5 x 6 x 7) 210HC x ES x I (5 x 11 x 7) 385RS x ES x I (6 x 11 x 7) 462Total number of cells = 3,277

Categories (Number of Cells)Gender - G (2)Age - A (7) Income - I (7) Household Composition - HC (5) Relationship Status – RS (6) Employment Status – ES (11)

Demographic investigationCombined data from 16 surveys

N≈30,000

Normal range76.4

(N)

73.4

66.6

71.4 71.970.5

61.360.0

58.5

55

60

65

70

75

80

(548)

Unemployed

(2,146)

<$15K

(2,774)

Livealone

(752)

<$15Kand

Alone

(144)

<$15Kand

Unemployed

(134)

Aloneand

Unemployed

(3,766)

Carers

PWI

Low Wellbeing in Australia

.

Major risk factors

What are the implications of thisunderstanding for public policy?

1. The management of national wealth

1.1 Managing inflation

1.2 Wealth distribution

1.3 Assisting disadvantaged groups

2. Policy on human relationships

To manage the two major resourcesthat protect SWB

Inflation

Lev

el o

f sa

tisf

acti

on

CP

I

74.4 74.5

75.6

74.1

75.3

74.6

76.3

74.8

75.6

75.375.4

75.9

75.3

74.674.4

75.3

73.2

6.0

4.7

2.5

4.0

3.2 3.3

0.0

2.7

2.3

4.3

2.3

2.0

3.3

2.32.3

7.5

-0.272

72

73

73

74

74

75

75

76

76

77

77

1 April2001

2 Sept2001

3 March2002

4 Aug2002

5 Nov2002

6 Mar2003

7 June2003

8 Aug2003

9 Nov2003

10 Feb2004

11 May2004

12 Aug2004

13 May2005

14 Oct2005

16 May2006

15 Oct2006

17 Apr2007

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Personal Wellbeing Index CPI/Month x 10

r = -.48 , p<.025

Consumer Price Index (for the quarter prior to the survey)

Public Policy

Increasedpopulationhappiness

IncreasingNational Wealth

In the conventional view it is automatic

How can we increase population SWB through wealth?

Mean of percent Happy and percent Satisfied with life as a whole

GNP/capita (World Bank purchasing power parity estimates, 1995 US

Economic growth and

Subjective Wellbeing in Japan

Deflated GDP/capita

Life Satisfaction

(Diener & Biswas-Diener, 2002)

0

50

100

150

200

250

300

350

400

450

500

550

1958 1960 1962 1964 1966 1970 1974 1976 1978 1980 1982 1987

Year

GDP is held as a percent

of its 1958 value

Life satisfactionis the actual

value foreach year

Public Policy

Increasedpopulationhappiness

IncreasingNational Wealth

It is not just about getting wealthier

As countries become richer, increases in population happiness can be achieved through managing

the distribution of wealth

EquitableWealth

Distribution

World Map of Gini coefficients http://en.wikipedia.org/wiki/Image:World_Map_Gini_coefficient.png

Gini index0 = perfect economic equality

100 = perfect inequality

Hong Kong= 54.3

Australia= 35.2

Denmark= 23.2

Who is the happiest of them all?

Norway Sweden

Denmark

Scandinavian welfare model causing wealth distribution

How satisfied are you with your life as a whole?

0.5 0.3 0.6 1.2 1.7

7.05.5

17.9

33.1

17.115.1

0

5

10

15

20

25

30

35

40

0 1 2 3 4 5 6 7 8 9 10

Frequency

The principle is simple

N≈30,000

Pathological Normal

The addition of resources here will cause the tail of the distribution to move to the right, and the mean population happiness will increase as a consequence

Special purpose samples

Members of Carers Australia

Mailed questionnaires

July 2007

N ≈ 4,000 returns

Normal range76.4

(N)

73.4

66.6

71.4 71.970.5

61.360.0

58.5

55

60

65

70

75

80

(548)

Unemployed

(2,146)

<$15K

(2,774)

Livealone

(752)

<$15Kand

Alone

(144)

<$15Kand

Unemployed

(134)

Aloneand

Unemployed

(3,766)

Carers

PWI

The wellbeing of carers

Diagnostic ranges of depression

Normal Mild Moderate Severe Extremelydepression depression depression severe

depression

0-21

22-31

32-48

49-64 65+

0

10

20

30

40

50

60

70

80

Level of

depression

Carer sampleaverage

Are you the person who provides most of the care?

76.4Normal range

73.4

*61.3

58.2

55

60

65

70

75

80

Yes(N=3,447)

No(N=295)

Primary care responsibilitiy

PWI

Depression is expensiveHawthorne, G., Cheok, F., Goldney, R., Fisher, L., 2003. The excess cost of depression in South

Australia: a population-based study. Aust. N. Z. J. Psychiatry 37, 362–373.

AustraliaDirect cost/annum ≈ US$ 2,500Indirect cost ≈ US$ 8,500TOTAL ≈ US$ 11,000

Protecting homeostasis

Intimate relationships help to protect wellbeing against negative challenges

Badstuff

Subjective wellbeingX

Protective resources(eg. money,

relationships)

It is almost universally assumed that any level of support is better than none

eg. “How much support do you receive from your partner? [ 0 – 10]

Researchers make two assumptions as:

1. A rating of 4 is better than a rating of 3.2. The data can be analysed through

linear statistics

Normative range

76.3

73.0

76.2

71.4

70.1

67.4

69.2

80.4

73.8

70.2

62.8

60616263646566676869707172737475767778798081828384

10 9 8 7 6 5 (4 + 3) (2 + 1) 0

Level of support

SWB

Partner

Level of support from partner

72.0Never married

70.6Live alone

80%

(51%) (15%) (14%)

18-25 26-35 36-45 46-55 56-65 66-75 76+

74.2

66.0

76.8

69.9

79.5

76.877.5 77.2 76.9

77.5 78.2

70.3

68.369.4

76.275.4

67.9 68.1

69.6

66.6

64

66

68

70

72

74

76

78

80

82

84

Age

SWB

Married

Never married

Divorced

Normal range

The protective/damaging effect of relationships with Age

Questions relevant to Public Policy:1. How can we strengthen marriages?2. Why are fewer young people getting married?3. What are the implications of easy vs difficult divorce?4. Should we assist single people to find a partner?

Conclusions

1. Measuring population wellbeing allows us to identify demographic subgroups with low wellbeing.

2. Targeting such groups for additional resources will act to raise the population wellbeing overall.

3. As low wellbeing is an indicator of depression, and as depression is a very expensive condition, the above strategy also has advantages for the economy.

4. There is both a social and an economic advantage from public policy directed to the enhancement of population wellbeing.

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Indicators Research, 64, 225-256.Cummins, R. A., & Lau, A. L. D. (2004) The motivation to maintain subjective well-being : A homeostatic model.

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Cummins, R. A., & Nistico, H. (2002). Maintaining life satisfaction: The role of positive cognitive bias. Journal of Happiness Studies, 3, 37-69.

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