In South Africa from 1993 to 1998, a period spanning the end of apartheid and the creation of a
more inclusive democracy, there were huge changes in the level and distribution of reported life
satisfaction. The percentage of South Africans reporting neutral or better life satisfaction increased for
every racial group, with the largest changes found among black South Africans. For the overall population,
the percentage reporting dissatisfaction with their lives as a whole fell by over 35 percentage points. For
black South Africans, the changes were even more dramatic with a drop of 45 percentage points. While
household survey data suggest that the economic and material living conditions of most South Africans
improved between 1993 and 1998, by a few important measures these conditions stayed constant or even
worsened. What then, was driving these large increases in household subjective well-being?
A second question we address is what exactly drives subjective well-being both at a moment in
time and over a time period. For policy makers, knowledge of what makes their constituents happiest or
contributes the most to their subjective well-being should help guide the allocation of scarce public
resources. Prior to these household surveys, the government had limited knowledge of the conditions under
which black South Africans lived, or the types of changes that would make them better off. Our findings
highlight the fact that household preferences can vary significantly over time.