I think that my life personally is getting better, but that Australia is getting worse. This might just be my perspective, but I guess that a lot of it has to do with the political scene – in particular, the war in Iraq, the new industrial relations laws, global warming… it seems like there are lots of problems in the world, but no willingness at a governmental level (and for many, no willingness at an individual level) to tackle them.

On the other hand, I wouldn’t take a happy pill. It is possible, even now, to cushion yourself from what is happening in the world by focusing on nostalgia shows like ‘Top 50 TV shows in Australia’ (for example) – but that doesn’t change reality. If someone has a problem with life as it is… how about doing something to make it better?

And despite the focus on terrorism, eroded civil liberties and various disagreeable government policies…

That’s a pretty big despite and I think therein lies your answer ;p

Also, it’s in people’s nature to complain regardless of how much improvement they have seen. It’s even taught in first year economics – if you ask someone how happy they are they will often lie and indicate they’re much less happy then they really are … because they believe their answer could determine actions which would impact their happiness (ie. if they say they’re unhappy something will be done to make them happier; if they say they’re happy the opposite). This happens at a subconscious / instinctive level, so even if you consciously know your answer to that survey wouldn’t make any difference to your life, you would do it just the same.

Not surprising. I think globalisation and “Keeping up with the Jones'” are two factors.

Just because you have a new car / upgraded house etc. doesn’t equate to happiness – because your next door neighbour has also now got the new car. The other day I saw an article which stated how one suburb was given 5 new bus routes and the neighbouring suburb was given 3. The neighbouring suburb felt that they were “worse off” from the increase in public transport, simply because the other one had gained 2 more routes. Ultimately, this sense of “competition” and “jealously” is something that probably has to be endured in a capitalist system. There will always be people “better off” than you.

“We fuss about 0.25% rises in interest rates and soaring petrol prices now, but at least we have jobs that can pay for them.”

I don’t agree with this. Housing affordability is at its lowest point ever. People are really struggling with their mortgages. They are over-geared due to the rise of McMansions and using home equity to renovate their houses, part of the keeping up with the Jones’ trend. At the moment, the number of mortgagee repossessions, particularly in Western Sydney, is very worrying. Reposessions in NSW are double that in 1990.

Housing affordability – http://www.smh.com.au/news/australian-capital-territory/interest-on-mortgages-debt-take-lions-share-of-income/2006/09/14/1157827077804.html

Reposessions – http://www.smh.com.au/news/australian-capital-territory/repossessions-at-alltime-high/2006/09/14/1157827074647.html

I don’t think you can compare unemployment in the late 1980’s / early 1990’s to now, because in that period unemployment was resulting from the opening up of the economy – manufacturing plants were being shut down as Australia, previously protected by tariffs, was starting to learn what globalisation was about. Also, people (and banks) were going broke because of loose bank lending, particularly to corporate cowboys, like Skase and Bond. Keating deliberately prolonged the recession by cutting more tariffs (resulting in further job losses) and increasing interest rates. The high interest rates helped to break the back of inflation, which has been a key factor of Australia’s prosperity over the last decade. And if not for the tariff cuts, we would have been smashed by the Asian Financial Crisis.

Finally, I think a lot of people are greatly spooked by terrorism, no matter how real / unreal the threat really is. Another example, like the tariffs, of adjusting to the forces of globalisation.

“Jubei”, I agree generally with the “Keeping up with the Jones” point – it’s the trite point on happiness and relativism that I was talking about above. But the question posed to people was not “Is life good?” (in an point-in-time sense) but “Is life getting worse?” (in a periodic sense). Subtle distinction, but it’s a different question.

I think you’re missing my point. Repossessions are high because of a variety of factors. Consumption has created households with high levels of debt (“over-geared” as you noted) and consumption is a by-product of consumer confidence arising from perceptions of a strong economy. High debt levels relative to household income also means that changes in interest rates impact households much more today than a decade ago (despite the actual rates being almost a third lower in an absolute sense). This is combined with a property bubble and investors getting caught up in the bull market. While having your house repossessed is undoubtedly traumatic, I suspect that the repossession is a result of household consumption choices (eg, buying into the property bubble at the wrong time, borrowing too much money, not factoring in how changes in interest rates can affect people) rather than an inability to meet payments due to factors beyond people’s control (eg, retrenchment due to growing unemployment).

Also, you don’t need to be an apologist for the Labor Government. You’re missing the point there too. I was not comparing economic conditions, or the governments of the periods. I was comparing the economic mood of the time, and regardless of the reasons behind high or low unemployment, during a recession, the mood is undoubtedly more pessimistic (>10% rates then, compared to the low rates we enjoy now). The interesting point here is that pessimism still seems to predominate regardless of what direction the economy is moving.

Regarding terrorism, I guess the terrorists and politicians have done a real good job of making everyone scared.

Everyone so far is treating the numbers quoted in this article without the scrutiny they deserve. Remember all they did was ask 1000 people “do you think life is getting worse?” – and 40% said yes. Is that a high number? What’s the benchmark? If the same survey were conducted during the worst of the recession, would that proportion be 60%? Or 90%?

Instead of comparing apples with apples, this survey is comparing one apple with itself. Given that, how can you take any of the “findings” seriously? Were the people who said life is deteriorating around during the depression? (And were they working adults, or children with no cares or responsibility who only know that they were sometimes refused when they wanted a toy?) Who was in the sample, anyway? (I don’t know the answer to that, but I can tell you that a phone survey sure as hell won’t be representative). Were they expressing their actual views (ie. if they had the chance to act on one of these questions, would they act in a way that supports what they said?)

You don’t know any of that, so you can’t even form some woolly logical assumptions about what that proportion “should” be (which is all you could hope to do with detailed knowledge of the methodology used, given there’s no hard benchmark to compare it to). And yet here you are arguing about whether the “conclusion” presented in the article is caused by this or that, as if it were fact. Come on, at least call bullshit when you see it.

As you say Stu, “But the question posed to people was not “Is life good?” (in an point-in-time sense) but “Is life getting worse?” (in a periodic sense).” But is that the right question to be asking? Hell, no. The only reliable way to measure a periodic variable is to ask the ‘point in time’ question repeatedly at different points in time and compare the results. Of course that’s expensive, and, by definition, time consuming, which just doesn’t make for a quick sensationalist piece of “journalism”.

Yes that’s absolutely right, hence my initial qualifier, “if representative of Australia at large”.

It’s an assumption which underpins all the comments made above. It’s an assumption made for the purposes of furthering discussion and not necessarily one which is reasonable. Obviously reaching a “conclusion” is rarely possible from a newspaper article (as opposed to the research an article purports to report on), and even less so where the underlying research involves a sample size that’s only 1000. However, having dodgy stats or incomplete information doesn’t preclude discussion about the underlying issues (whether those issues are accurately represented or not in the article).

My point was – why try to explain why a “surprisingly high” number of people say they feel their quality of life is deteriorating (by “some measure”), when the “surprisingly high” is the part in question?

Let me put it this way – what would that proportion have to be for you to think it was low? Or ‘about right’? What if you asked your neighbour what he thought it should be? Maybe when only 4 out of 10 say life is getting worse, that’s when it’s really good! Since we’ve never conducted this test in a different period of time, we can’t know what’s a “high proportion” or what’s not.

I wasn’t saying those statistics aren’t representative – let’s ignore sample size and the like for a moment, and imagine they had conducted rigorous face to face interviews with 18 million people. Normally, if you wanted to show that “people think life is worse despite economic conditions being better” you would do this:

1990

——

Economy: Poor.

Proportion of people who think life’s getting worse: 20%

2006

——

Economy: Good!

Proportion of people who think life’s getting worse: 40%

Conclusion: Economy got better, but more people think their quality of life is deteriorating – negative correlation! Wow, controversy! (Which is basically the tone of the article, and the discussion above).

What they actually did was:

1990

——

Economy: Poor.

Proportion of people who think life’s getting worse: ??? (not measured!)

2006

——

Economy: Good!

Proportion of people who think life’s getting worse: 40%

Conclusion: OK so the start of the economy has improved .. but as for the proportion of people who think life is getting worse … well we don’t really know. But let’s write the article anyway and say that 40% is surprisingly high.

(Or maybe it’s the readers who form that subjective opinion).

Well let me throw this into the pot: given people’s natural (and scientifically documented, I’m sure, somewhere, if it’s taught in university level economics) tendency to downplay their endowment of goods, and their tendency to reminisce about the ‘good old times’ of yesterday (since the human mind is designed in such a way that good memories stay around longer than bad ones), I would expect 80+% to have said that their quality of life was falling. And yet only 40% said that. Wow what a low number! I guess that the improving economy really has made its mark!

Note that I’m at no point above questioning the validity of the 40% number itself. I think we can both agree that I could, if pressed, but as you said your “if representative” basically covers that.

What I’m saying is that even if that 40% IS representative, you’re still interpreting it in a way that is, essentially, completely subjective, and it would be just as valid to take as given completely the opposite view and then have a discussion about why that has come to pass.

You’re trying to explain a “controversial finding” that doesn’t exist, really. And you don’t need a calculator and a stats course to tell you that, just some simple logic.

Addendum: A sample of 1000 is pretty damn high, actually. If you took a simple random sample (caveat: not the case here, but anyway) your standard error would be about 1.5%, giving you a 95% CI of 37% to 43% for that proportion.

Use this nifty little tool I wrote while I was working at ABS:

http://www.nss.gov.au/nss/home.NSF/pages/Sample+size+calculator?OpenDocument

(Aside: they were just starting the NSS when I was working there in 2003 … nice to see they’ve finally got it off the ground … I might send them an email ;p).

Stu,

I’m not here to debate the merits of how statistically reliable the sampling or survey was, but I think the results do carry some weight.

My point about rates is that you can’t compare interest rates for different periods, because there are different macro forces at play.

I agree that pessimism will be higher in a recession, all other things being equal. But today the forces of globalisation are much more rampant. Back then globalisation was only starting to impact Australia’s population, though in a big way through closure of manufacturing plants, particularly in Victoria, resulting in unemployment.

But now, people are constantly bombarded with information, imagery etc from all around the world, and it’s generally negative, because it sells papers. You wake up, and the first thing you see is Osama’s face on the news. You catch the bus and see the Australian government’s warning on terrorism. You get in the lift and get really irritated when two people are having a conversation in an unintelligible language. Hey, they might even be talking about you. You cross the street and see two guys with turbans carrying large backpacks. For a lot of Anglo Australians, particularly the older generations, Australia today is a real shock to the system.

I agree partially that “we at least have got jobs now.”, but for a lot of people it’s all about perceptions. The old “Immigration is bad, because they’ll come and take our jobs” line is still heavily used. Labor is really pushing the line on illegal immigrant workers on low wages taking away local jobs.

I’d say a lot of Australians are not comfortable with the outcomes of globalisation, particularly the loss of manufacturing, the loss of Australian icons and brands, refugees, immigration, terrorism, because like unemployment in 1990, it’s all out of their control. Just look at the current citizenship debate.

Andrew Robb, when launching the new citizenship measures said, “It is an initiative to give the broader Australian community comfort in a very globalised world where we’ve got so many people moving around the world.”

And a large number of Australians unfortunately believed that interest rates would not increase under the current government – the last election was fought on this very point. So the shock of higher payments, the fall in their property value, having to keep up with the Jones’, plus the encroaching forces of globalisation, means that to a lot of people, “life is getting worse.”

I think this is reflected in current television programming – there are a lot of programs on “Remember how life was 20 years ago”, or “Where are they now?”. On talkback ratio it’s very common to hear the shock jocks reminiscing with their listeners.

I mean, even Phil Gould, a rugby league columnist, when writing about the Bulldogs supporters (who are some of the most hated supporters for various reasons), wrote an article reminiscing about old times, “when you could leave the door open at home, could buy a sweet for 5 cents and a dinner at the local Chinese restaurant was a treat”.

“The interesting point here is that pessimism still seems to predominate regardless of what direction the economy is moving.”

I agree. There was a study on happiness, which found that once a nation’s wealth reached the level of Mexico, there was no additional happiness gain, so economy / financial position has its extents. There are other happiness determinants.

Jubei, was your day today better than yesterday?

What about your life this year compared to 5 years ago?

What about compared to 15 years ago?

As a few people those 3 questions and I bet you’ll find that a lot more people think life was better 15 years ago, than people who think yesterday was better than today.

Why? Nothing to do with stats or maths, just the way humans remember stuff. Positive impressions stay a lot longer than negative ones – so when you think back to 15 years ago your mind has already supressed/erased all the negative memories, and only the positive ones remain.

But your memory of yesterday is pretty accurate across the board. That’s why comparatively, “15 years ago” seems so good.

This is true regardless of the environment people are in (unless there’s a huge disbalance there – eg. if 15 years ago you were being tortured as a POW, you would probably say that life now is better). There’s even a monty python skit about it.

(Not to mention enormous prevalence in stats literature, even though it’s a totally woolly subject, unlike most other areas of stats.

Check http://en.wikipedia.org/wiki/Recall_bias if you’re interested, although I suspect you won’t be).