There is little doubt life was less satisfying for many people in 2020. The pandemic certainly put a dent in many a day – or days – and as we near the end of the year, most would be looking forward to a more satisfying 2021.
What value do you place on life satisfaction?
New analysis from the Australian National University (ANU) puts a dollar value on the life satisfaction we lost during the pandemic.
The report estimates that Australian adults lost the equivalent of $338 billion in life satisfaction due to COVID-19.
The ANU Centre for Social Research and Methods examined the financial value of declining wellbeing among adults between March and November. It found the decline during the height of the pandemic and associated lockdowns was “a massive hit to happiness, experienced by Australians from all walks of life”.
“Our analysis, which examined the experiences of more than 3000 people, found that each person lost the equivalent of $17,000 due to declining wellbeing or life satisfaction,” said study co-author Professor Nicholas Biddle.
“Put another way, that drop in life satisfaction was worth $423 in lost income per week.”
Unsurprisingly, those living in Victoria took a bigger hit to their wellbeing compared to the rest of the Australian population – less so for those living in regional areas or outside a capital city.
Australians aged 55 and over, people who spoke languages other than English at home and those living in ‘premium postcodes’ also had lower levels of lost life satisfaction.
The good news is that since the end of November, life satisfaction and wellbeing are on the uptick and are at the same levels as before the 2019/20 bushfires.
The hit to household budgets was a major factor in the loss of life satisfaction.
“It isn’t just declining wellbeing that has hurt Australians. The pandemic has blown massive holes in household budgets,” said co-author Professor Matthew Gray.
“Our analysis shows between March and November, the average household lost a total of $4726 in income.
“That’s a total loss of $46.7 billion for Australian households over the COVID-19 recession.”
The researchers also monitored income inequality across Australia during the pandemic.
“At the beginning of the pandemic, between February and April, income inequality declined slightly,” said Prof. Biddle.
“This is due to the financial support provided by governments to households at the lower end of the income distribution.
“However, in the middle of the pandemic, between April and August, inequality increased. This was due to a widening between the middle and the low parts of the income distribution and a widening between the high and the middle parts.
“And while the last few months have seen some convergence in income levels, Australia still appears to have higher inequality levels at the end of 2020 than at the start.
“Clearly, how we protect the most vulnerable households in our society and economy during the ongoing COVID crisis remains a key and difficult challenge for policymakers – especially as government budgets continue to plummet deeper into the red.”
How much did your life satisfaction dip during the pandemic? Do you feel it is on the rise?
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