Reported levels of household life satisfaction, also referred to
as subjective well-being, increased dramatically in South Africa following
the end of Apartheid. This study uses household surveys from 1993-1994
and 1998 in South Africa to investigate why. Models of subjective wellbeing
are estimated following previous literature and a Oaxaca
decomposition is then applied, which allows subjective well-being and the
determinants of subjective well-being to be examined in a new framework.
The decomposition determines what portion of the life satisfaction
increase in South Africa is due to improvements in living conditions and
what portion is due to changes in the way certain factors ‘reward’ life
satisfaction. The results suggest that fully 92.9 percent of the increase in
life satisfaction is due to changes in the reward from the factors
considered, not to improvements in living conditions. The results suggest
that the determinants of subjective well-being can change substantially
over time, and that changes in governmental and social systems can be as
or more important than more commonly considered determinants of
subjective well-being.