The concept of subjective wellbeing (SWB) broadly refers to the level of life satisfaction in general that individuals self-report. According to Tatarkiewicz (1966), present level of SWB is both retrospective and prospective. Therefore, SWB of an individual is expected to straddle over the lifespan of the individual (Gomez et al 2013). One mechanism for this is through the confounding factor of individual personality. As the hedonic theory suggests the inherent personality traits remain stable over the lifespan of an individual (Gutiérrez 2005; Brickman & Campbell 1971).
The most commonly cited explanation for the hedonic treadmill is adaptation level theory which consists of two effects namely; contrast and habituation (Brickman, Coates & Bulman 1978). A contrast effect is when the quality (positive or negative) of an experience is dependent on its relation to a previous reference point (Tversky & Griffin, 1991; Griffin & Gonzalez, 2013). This highlights that happiness is also partially derived from being able to recall the memory of the major event. Memory is therefore an important conduit that links past and present satisfaction. As SWB is largely dependent on the individual’s current satisfaction relative to their previous satisfaction, it would seem that the ability to accurately recall their circumstances related to their past satisfaction (through memory), is important for formulating current satisfaction.
Much of the literature assumes that people are able to access information regarding their long-term subjective well-being which is stored in their memory (Pavot & Diener, 1993). However, attempts to understand how the past influence the determination of current life satisfaction, through the intermediating role of memory; have pointed to bias in memory recall (Kahneman 1993; Adler 2013; Easterlin; Prati & Senik 2020; Kaiser 2020).
Kahneman et al (1993) highlights the memory biases through their peak-end theory which argues that memory is crafted by the most intense moments and the way an experience ends, rather than the average (or sum) of the entire experience. Another type of bias in the assessment of recalled well-being, is the influence of the current situation of the individual (Easterlin 2001). As people adapt to a new situation, they re-evaluate their view of the past in the light of their new benchmark (current situation). Therefore, a retrospective evaluation is likely to be distorted by the current situation and not entirely determined by the lived moments in the past.
In a similar vein, Adler (2013) pointed to the bias arising from heterogeneity in intrapersonal preference over time which can cloud effective comparison of individual wellbeing over time. Kaiser (2020), also emphasized that memories itself could be biased due to objective differences in the past and present circumstances, mood congruency, expectation or anticipation effect.
Prati & Senik (2020) is a recent empirical study that has explored the interdependence of past and present SWB. Prior to that, the empirical attention on past satisfaction was limited either within the context of hedonic adaptation literature (Clark, 1999; Wilson and Ross, 2000; Van Praag and Ferrer-i Carbonell, 2004; Senik, 2009; Steffel and Oppenheimer, 2009), or testing of reliability of life satisfaction measurement (Atkinson, 1982; Michalos and Kahlke, 2010). Prati and Senik (2020) found through a study of three national surveys across Britain, Germany and France that on average, people tend to overstate the improvement in their well-being over time and to understate their past happiness. But the study also finds asymmetry in perception; while happy people perceive the improvement over time to be better than it was, unhappy ones tend to exaggerate its worsening. The authors conclude that feeling happy today implies feeling better than yesterday.
The implications of emotion on memory however can differ significantly between positive and negative experiences. Similar bias in memory is highlighted by studies that show that relatively unhappy people exhibit somewhat conflicting memorial tendencies vis-à-vis happiness, whereas very happy people show simpler, and less conflicting, tendencies (Liberman et al 2009; Sharot & Yonelinas 2008). On the other hand, other studies find that negative emotion can enhance memory recall (Kensinger 2007, Alexander et al. 2005; Foa et al. 1989, Ochsner 2000). Through an experiment on Russian students, Balatsky & Diener (1993) showed that during predominantly high dissatisfaction levels, the mean recall of positive events was greater than the mean recall for negative events.
The above review of the relationship between memory recall and present SWB brings out the interdependence between the two. While the memory of the past may be contaminated by the present situation, the present SWB is also influenced by the memory of past. Empirical literature reviewed above have addressed either of the simultaneous relationships, while ignoring the other, potentially creating biased estimates. Therefore, this study makes a contribution to literature by delving into the relationship between past and present satisfaction, through the conduit of memory, while accounting for the endogenous relationship. Lewbel’s heteroscedaticity based instrumental regression is used to estimate the endogenous relationship between SWB level and recall of past SWB level. This study further improves on Prati and Senik (2020) by considering the additional element of future expectations in driving recall behaviour, based on the contention in literature (Tatarkiewicz 1966; Gomez et al 2013) that present level of SWB is both retrospective and prospective. Lastly, undertaking the analysis within the context of South Africa (a developing country ranking 106 in Happiness index (Helliwell et al 2019)) provides additional insights from other recent studies focused on developed countries with higher average satisfaction levels (like Kaiser 2020; Prati and Senik 2020).
The proposed research will attempt to answer the following questions in the context of a country with low average satisfaction:
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Is past and future SWB related to present subjective wellbeing?
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How does intertemporal (past and future expectations) contrast and contemporary social contrast associate with current SWB?
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How accurate is recall of past subjective well-being?
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What are the correlates of bias in recalled subjective well-being?
These are fascinating questions that have been raised in psychology literature within the context of developed countries with high average levels of satisfaction, but less so within the context of a developing country with lower average satisfaction level. The context of study is relevant as Prati & Senik (2020) argues that the nature of bias is dependent on the level of satisfaction, which are vary significantly across countries of different developmental status. Based on this premise, overestimation bias is likely to dominate for societies with high satisfaction level (as developed countries), as happy people tend to overstate the time improvement in their life satisfaction. This would imply that in a society with low satisfaction, underestimation bias is likely to dominate as unhappy people tend to overstate the decline in their life satisfaction. However, average SWB level has been increasing and SWB inequality declining in South Africa in recent years, indicating that less happy people have been experiencing improved SWB. Future expectations therefore are likely to play a key role and, overestimation bias from less happy individuals is a possible outcome. The South African context with low but increasing average level of satisfaction, and declining SWB inequality gives an ideal context to test this premise.