Friday, September 9, 2022

Overall life satisfaction: Satisfaction with family life and health are the strongest predictors while satisfaction with income and leisure time are the weakest predictors

Happiness, domains of life satisfaction, perceptions, and valuation differences across genders. Stefani Milovanska-Farrington, Stephen Farrington. Acta Psychologica, Volume 230, October 2022, 103720.


• Using German panel data, we examine the association between satisfaction with domains of life, values, and relative perceptions and overall subjective well-being. We also explore valuation differences between men and women.

• The findings suggest that perceived satisfaction with different domains of life has a significant impact on overall life satisfaction.

• We also find that how happy people believe they are with different life aspects is a stronger determinant of their overall life satisfaction than their actual circumstances.

• Family and health satisfaction consistently matter the most for overall life satisfaction while financial satisfaction is least important for both women and men in almost all specifications. We also find gender differences in values.

• Family and health satisfaction matter the most for overall well-being of both men and women. However, men exhibit higher valuation of work satisfaction than women, whereas women value their partner's happiness more than men.

Abstract: Happiness is strongly correlated with goal attainment, productivity, mental health and suicidal risk. This paper examines the association between satisfaction with areas of life and overall life satisfaction, the importance of relative perceptions compared to absolute measures in predicting overall life satisfaction, and differences in the domains of life which are the most strongly related to overall life satisfaction of men and women. The findings suggest that relative perceptions have a large statistically significant association with SWB. Satisfaction with family life and health are the strongest predictors while satisfaction with income and leisure time are the weakest predictors of overall life satisfaction for both genders. Work satisfaction is more important for men than for women, whereas partner's happiness is more valued by female respondents. Satisfaction with household compared to personal income has a larger association with life satisfaction in all subsamples except employed women. Understanding the perceived and factual determinants of happiness has urgent implications discussed in the article.

Keywords: Subjective well-beingSatisfaction with areas of lifePerceptionsValuesGender differences

6. Discussion and implications

In this section, we provide some potential explanations of our finding that perceptions are a better predictor of happiness than variables reflecting actual circumstances, and explore implications of the study.

First, individuals' satisfaction is a function of their target, a notion known as the aspiration theory, or multiple discrepancies theory, in psychology. It suggests that individuals are not able or willing to make absolute judgements. They form aspirations by comparing themselves to the past, expected future or the surrounding environment, and evaluate outcomes based on the discrepancies between their aspired goals and current circumstances (Stutzer and Henne, 2014). Therefore happiness depends on the gap between aspiration and achievement rather than the achievement itself (Michalos 1991). For example, Stutzer (2004) finds a negative correlation between a larger gap between aspiration and income, and happiness. Similarly, happiness depends on people's reference group. Literature has found a negative relationship between happiness, and income (Clark and Oswald, 1996McBride, 2001Guilbert and Paul, 2009) and education of the comparison group (Nikolaev, 2016). If this is true, social comparisons, aspiration and gaps between goals and achievements explain why personal interpretation of the facts has a greater association with overall life satisfaction as compared to the true state of reality.

Second, our results are consistent with the findings in the psychology literature that individuals' behavior depends on what they believe the external environment is rather than what it actually is. Psychology explains discrepancies between perceived and actual circumstances by bounded rationality and cognitive biases, including confirmation (i.e., interpreting facts to match prior beliefs, judgement and choices), anchoring (i.e., judging based on initial information), randomness (i.e., attributing value to irrelevant experiences) and availability (i.e., judging based on readily available information which does not necessarily accurately reflect reality) biases. In addition, genetic factors are found to explain about 44–52 % percent of the variation in SWB (Lykken and Tellegen, 1996).

Third, Easterlin's (1974) paradox suggests that our current economic system might be sacrificing human well-being in exchange for GDP per capita growth. The dominance of relative perception over objective level of consumption as determinants of happiness, if externally valid outside of the German panel data analyzed here, would provide an acceptable solution to the puzzle that Easterlin observed.

It may be the case that only rapid economic growth would allow for individuals to notice the increased quality of life in a meaningful way. If so, we would expect to see increased levels of happiness only during periods of extremely rapid economic growth where people have a reference point within their own memory of less abundant times. Regarding the second industrial revolution, Keynes (1919) writes: “What an extraordinary episode in the economic progress of man that age was which came to an end in August 1914! The greater part of the population, it is true, worked hard and lived at a low standard of comfort, yet were, to all appearances, reasonably contented with this lot.” The almost overnight transition from iron to steel of the Second Industrial Revolution and the subsequent falling consumer prices could have provided such a time period where quality of life improved fast enough for people to perceive the difference and to derive happiness from their perceptions.

It may also be the case that cultural values play a much larger role in mitigating unhappiness from relative income dissatisfaction. Cultures which promote happiness through relative perceptions might employ devices to alter those perceptions. Mealtime prayers often included reminders of gratitude, and the first links between gratitude, economics, and psychology are starting to be recognized (Desteno et al., 2014). Also, depending on the version, 20 % to 30 % of the ten commandments contain prohibitions against covetousness which is shown by Milfont and Gouveia (2009) to negatively affect SWB. Alternatively, cultures which do not succeed in mitigating unhappiness from relative income dissatisfaction might glamorize conspicuous consumption (Veblen, 1899) such as the social media phenomenon of the “Instagram model” which could be a major cause of the current mental health crisis in the US through the vector of unhappiness. It also potentially sheds some light on the historical pejorative “nuveau riche” as wealthy members of stable societies may have benefited from avoiding ostentatious displays and harbored animosity toward people who through conspicuous consumption fostered unhappiness in lower income individuals thereby destabilizing society. This is a fruitful area for future research, but the dominance of perception over objective state takes the enigma out of Easterlin's puzzle.

Because of the relationship between happiness, and health, productivity and goals attainment, understanding its determinants is important for predicting individual and social outcomes. More importantly, the recent social isolation, uncertainty about the future, health and financial concerns have led to a decline in the ratings of life satisfaction, deterioration of individuals' mental health, increased stress and worry rates, rising number of people experiencing symptoms of depression, and elevated suicidal rates (Witters and Harter, 2020). An insight into the gender differences in the factors which generate greater life satisfaction is useful in predicting the impact of the pandemic on different groups of people, identifying those at greatest risk, and developing a plan for prevention of the forementioned adverse effects. Specifically, public awareness of the finding that self-perceived factors have a larger impact on SWB as compared to actual current circumstances is likely to incentivize people to put effort in viewing reality differently and realizing their happiness with alternative aspects of life. This can increase their level of overall happiness, and thus prevent mental disorders, long-term diseases and suicidal risk.

Furthermore, our finding that satisfaction with family life and health has a larger association with happiness relative to satisfaction with income has implications related to the direction of efforts of decision-makers. Our results suggest that their efforts might have a larger positive impact on societal well-being if directed toward ensuring improvement of health outcomes through prevention of further spread of viruses and assistance provided to infected people and those in high risk groups, and emphasizing the importance of strong family support and close attention to family life, rather than increasing the financial well-being of the population.

We consistently found that positive fortune telling enhanced financial risk taking particularly among men, even non-believers

Positive fortune telling enhances men’s financial risk taking. Xiaoyue Tan, Jan-Willem van Prooijen, Paul A. M. van Lange. PLoS One, September 7, 2022.

Abstract: Fortune telling is a widespread phenomenon, yet little is known about the extent to which people are affected by it—including those who consider themselves non-believers. The present research has investigated the power of a positive fortune telling outcome (vs. neutral vs. negative) on people’s financial risk taking. In two online experiments (n1 = 252; n2 = 441), we consistently found that positive fortune telling enhanced financial risk taking particularly among men. Additionally, we used a real online gambling game in a lab setting (n3 = 193) and found that positive fortune telling enhanced the likelihood that college students gambled for money. Furthermore, a meta-analysis of these three studies demonstrated that the effect of positive fortune telling versus neutral fortune telling was significant for men, but virtually absent for women. Thus, positive fortune telling can yield increased financial risk taking in men, but not (or less so) in women.

General discussion

Three experiments and a meta-analysis uncovered three main findings. First, findings revealed a positive association between superstitious beliefs in fortune telling and financial risk taking. People who reported higher superstitious beliefs in fortune telling also reported an increased tolerance for financial risks (found in Studies 1 and 2). Second, in general participants indicate that they do not believe in fortune telling (across three studies). Third, despite the fact that they did report not to believe in fortune telling, participants (especially men) nevertheless were affected by it: Positive fortune telling enhances men’s financial risk taking (across three studies), whereas no such effect of positive fortune telling emerged among women (except in Study 3). This risk-taking effect for men in the financial domain as consequence of a positive fortune telling was further supported by a meta-analysis of the three experiments.

The paradox–not believing it but acting upon it

Our research findings are consistent with [13]’s claim that people often are susceptible to superstition even when they claim to not believe in it. There is a paradox about believing in superstition in modern times—that is, people act upon superstition while they claim to not believe in it. Since the rise of scientific empiricism, superstition has been negatively valued in society. For instance, it was believed that superstition was caused by the workings of a lower form of human intelligence [45]. New insights produced a shift in common understandings of superstition, however. As various scholars have suggested, it may be part of human nature to construct causal relationships among events, regardless of whether the causal links are real or not (e.g., [1216]). Specifically, it is common for people to be superstitious by believing that luck (good or bad) is controllable or predictable, even if they do not admit to it. Across three studies, we found in general, people claimed that they do NOT believe in fortune telling, but nevertheless, particularly men’s financial decisions were affected by the (positive) fortune telling outcomes. Unless people know that they do not want to admit to it, these findings provide novel but indirect evidence that superstition may exert influence on people at a subconscious level.

Gender difference in superstition

There is no scientific consensus yet regarding the question if men or women are more superstitious. Some researchers proposed that women are more superstitious [46]. However, some research evidence is consistent with the notion that men are more superstitious. For instance, a field experiment on lucky numbers suggested that being assigned to lucky numbers does not influence women but increases overconfidence among men [34]. In two of our three studies (Study 1 and 2) we found that men have stronger beliefs in fortune telling. In addition, according to the meta-analytic overview of three studies, men were significantly affected by positive fortune telling whereas women were not. The present research therefore supports the idea that men are more susceptible to superstition than women, at least in financial decision-making situations.

Superstition and risk taking

In two of our three studies (Study 1 and 2) we found significant positive associations between superstition and risk taking. These findings are consistent with the hypothesis that superstition works as a coping-mechanism in a risky decision-making situation. From this point of view, the riskier the situation, the stronger people’s need for superstition. Some groups, including sportsperson, gamblers, sailors, soldiers, miners, financial investors and college students, who have to deal with high-risk situations are also considered as traditionally superstitious groups [1]. Additionally, superstitious beliefs were found to be correlated with gambling intensity among EGM (electronic gaming machine) gamblers [47]. A recent study [48] also suggests that the presence of religious images tends to increase individuals’ subjective probability of winning the lottery, and that subjects therefore believe in a god who intervenes actively in the world in response to their requests.

This point of view may also help people understand why men are more affected by a positive fortune telling. According to a meta-analysis [33], men in general are more risk taking than women. Men consistently take greater risks than women in the financial domain [4950]. From an evolutionary perspective, risk-taking behaviors may serve multiple important functions for men, such as acquiring social status and resources, attracting high-quality mates, and establishing and affirming manhood after gender threats (for a review, see [51]). However, risks naturally entail potential losses, and thereby pose potential threats to risk-takers. Men are not totally blind to risks. Superstition suggesting that good luck is ahead may increase men’s expectations of “beating the odds”, decrease anxiety among men, provide a justification for a risky choice, and consequently increase their risk-taking behaviors. Put differently, men are more likely than women to take risks in the financial domain, and positive superstitious beliefs encourage such risk-taking further.

Strengths, limitations, and future directions

At least two strengths are noteworthy. First, as noted earlier, research on the effects of superstition on financial risk taking constitutes largely uncharted territory [21], and thus the present research is filling a gap in the literature on superstition and decision-making. We regard this as an important gap also because it adds to the literature that seemingly irrational factors do affect decision-making, even in a high-status domain (financial decision-making) that many people might associate with logical analysis and precision. Second, most empirical research on this topic was conducted with Asian participants (e.g., [25]), who are from cultures where superstition and rituals are slightly more common. The present research was conducted with Western samples, which may add to the generalizability of the findings on superstition.

We also want to discuss several limitations of the current research. One limitation is that because the empirical study of superstition is quite novel and theories of superstition are still rather preliminary, the present research is mostly driven by assumptions about the underlying processes that cause these effects. We believe the findings reported may therefore contribute to theorizing illuminating why men are subject to superstition when they take financial risks. Another limitation pertains to the scope of the superstition construct that we investigated. Specifically, we only investigated one form of superstition, which is fortune telling. It cannot be concluded with confidence whether the findings will replicate for other forms of superstition. Moreover, the saliency of the payoffs in the experimental study conducted in the lab was relatively low, as compared to the payoffs in a typical economic experiment, and the overall financial incentives for all the participation were rather low as well. According to [5253], risk aversion increases sharply when payoffs are scaled up. These low payoffs, particularly the small stakes of mild risks for the gambling decision-making in Study 3 with a fixed payment of 2 euros for both options, could have affected the ecological validity of the studies. But however, throughout history, kings and generals customarily called on astrologists or fortune-tellers to obtain advice prior to making any important decisions (e.g., launching a military campaign) [54], it is a question whether the risk-enhancement effect of a positive fortune telling outcome would be present or absent for a real-life decision making involving big stakes. This suggests worthwhile empirical challenges for further research. Besides, the possibility that it is the “positivity” of the message that actually drives men to take more risks under a positive fortune telling condition cannot be ruled out with the present research. This could be investigated in future research on the effects of fortune telling on people’s risk seeking. Finally, there may be validity issues on the measurement instruments used for the present research. While some of our measures were commonly used by other researchers (e.g., the financial risk tolerance test), other measurement instruments have not been validated in prior research (e.g., the items for beliefs in fortune telling). The items of these scales did directly ask for the constructs of interest, however, substantially minimizing potential threats to the construct validity for these measurement instruments.

Keju, the Chinese civil service exam system, was an anti-mobility mobility channel, depriving the civil society of access to the best human capital

The Rise and the Fall of the EAST: Examination, Autocracy, Stability and Technology in Chinese History and Today. Hasheng Huang. Yale Univ Press, 2023.

[h/t Tyler Cowen, Marginal Revolution, Sep 9 2022.]


For many years, I struggled to come up with a coherent explanation for the power, the reach, and the policy discretion of the Chinese state.  There is coercion, ideological indoctrination, and probably a fair amount of societal consent as well.

Keju [the civil service exam system] had a deep penetration both cross-sectionally in society and across time in history.  It was all encompassing, laying claims to time, efforts and cognitive investments of a significant swath of Chinese population.  It was incubatory of values, norms, and cognitions, therefore impacting ideology and epistemology of Chinese minds.  It was a state institution designed to augment the power and the capabilities of the state.  Directly, the state monopolized the very best human capital; indirectly, the state deprived society access to talent and preempted organized religion, commerce, and intelligentsia.  The Chinese state in history and today is an imprinted version of this Keju system.

Chinese state is strong because it reigns without a society.

Tyler Cowen adds:

Among the other interesting features of this book, including many, are:

There is a very useful discussion of Sui Wendi, the man who reunified China (and is barely known in the West).

Just how much the exam system expanded in the 17th century, to support a larger and growing Chinese state.

Why Chinese bureaucrats in the provinces tend to be generalists and the ministerial officials tend to be specialists.


"A state without society is a vertically integrated organization...Keju's powerful platform effect crowded and stymied alternative mobility channels...the Keju was an anti-mobility mobility channel."

"In the 1890s, China's population literacy was only 18 percent, way below 95 percent of England and the Netherlands."

Exam competition takes up so much of individual mind space.  Furthermore the competition atomizes society and makes it harder to form the kinds of collective movements that might lead to democracy.


"Throughout Chinese history very few emperors were toppled by their generals or senior functionaries, a sharp contrast with the Roman Empire."


When their primary-school teachers were disproportionately female ca. 1940, female students were more likely to complete high school & attend college, & had increased longevity

The Impact of Female Teachers on Female Students' Lifetime Well-Being. David Card, Ciprian Domnisoru, Seth G. Sanders, Lowell Taylor & Victoria Udalova. NBER Working Paper 30430. Sep 2022. DOI 10.3386/w30430

Abstract: It is widely believed that female students benefit from being taught by female teachers, particularly when those teachers serve as counter-stereotypical role models. We study education in rural areas of the US circa 1940--a setting in which there were few professional female exemplars other than teachers--and find that female students were more successful when their primary-school teachers were disproportionately female. Impacts are lifelong: female students taught by female teachers were more likely to move up the educational ladder by completing high school and attending college, and had higher lifetime family income and increased longevity.