Past and Present Subjective Wellbeing: The Role of Contrast and Memory
Abstract This study is an attempt to analyse the interrelationships between current, past and expected future subjective wellbeing (SWB) through the intermediating role of memory using the National Income Dynamics Study panel dataset for South Africa. The contribution of this study is in exploring the role of contrast (inter-temporal and social) in determining; a) the current levels of SWB and, b) the drivers of recall bias; within a causal framework in the context of a country with low average SWB and high SWB inequality. The results indicate significant presence of hedonic adaptation and reveals past and future contrast as important correlates of current subjective wellbeing. In addition, a perceived improvement in current happiness from the past, is associated with higher levels of current SWB, highlighting the intermediating role of memory. Memory, however, is observed to be biased with only 42% accuracy. Higher levels of current subjective wellbeing are found to enhance the probability of correct recall of past. An overall improvement bias is evident among those in the lower segment of the SWB distribution. The results reinforce the hypothesized simultaneous relationships between current SWB, inter-temporal contrast, and recall behaviour. Further the differences in our findings from European studies emphasise the relevance of context in driving these relationships.