Is there an issue of respect involved in climbing Uluru?

When I visited Uluru for the first time about 10 days ago I learned a little about its significance to the Anangu (western desert people) who are the traditional owners. A few days later, while we were driving home to New South Wales, the board of management of the Uluru - Kata Tjuta National Park released a draft management plan for 2009-2019 which raises, among other things, the question of whether visitors should continue to be allowed to climb the rock. The board was seeking comments from the public.

Before we got home, however, Kevin Rudd, Australia’s prime minister, had weighed in with the view that it would be “sad” if people were banned from climbing the rock. While citizen Rudd is entitled to express his views on anything and everything (as he does incessantly) I think it will be sad if his intervention closes off further discussion of this issue.

The significance of Uluru to Anangu is reasonably clear. They believe that as direct descendants of the ancestral beings who created the landscape at the beginning of time they are responsible for its protection and appropriate management. They also believe that they have a responsibility to safeguard visitors to their land. The main reason that traditional owners have given to discourage visitors from climbing the rock is the danger involved: “We feel great sadness when a person dies or is hurt on our land”. The draft management plan suggests, however, that an issue of respect may also be involved. It quotes Tony Tjamiwa: “That rock is really important and sacred. You shouldn’t climb it! Climbing is not a proper tradition for this place” (p 86).

What is the significance of Uluru to visitors? Some of the literature about it suggests that it has something to do with the size of the object – it is 9.4 kilometres in circumference and rises about 340 metres above the surrounding plain. That might seem big to those who think of rocks as large stones, but Uluru is actually a remnant of an ancient mountain. It is composed of sedimentary rock that has become heavily eroded over time.

Uluru is a natural object of great beauty. The explorer Ernest Giles described it as “ancient and sublime”. Giles, however, was not the first European to visit the rock. William Gosse got there first, in 1873, and named it Ayers Rock, after Henry Ayers (a South Australian politician who is most remembered these days for having had Uluru named after him).

Tourists have been interested in travelling to Uluru for over 60 years, with the first vehicular track being constructed in 1948 in response to this interest. In the early 1950s several motels and a camping ground were built at the base of Uluru. Increasing tourism resulted, in 1958, in the area that is now the Uluru – Kata Tjuta national park being excised from an aboriginal reserve. Traditional ownership of the park was recognized in 1985 under an agreement in which it was leased back to the federal government for 99 years.

Most visitors to Uluru presumably go there primarily in order to see Australia’s most recognisable natural icon first hand. Although climbing the rock has become something of a tradition, only about one-third of visitors now choose to climb. I imagine that fewer people would climb if it was made clear in the literature distributed to visitors that an issue of respect may be involved as well as concerns about safety.

It seems to me that this is the crux of the issue. Is there a way that it would be possible for visitors to be permitted to climb the rock that would be consistent with appropriate respect for this place?

Do people make good choices between income and leisure?

“What are the applied implications of our findings? In the work area we suggest that a balance between hours of work, social time and leisure will produce the highest well-being, whereas even work that is enjoyable will produce less well-being if carried out for too many hours. Conversely, it would be an error to assume that people would be happiest if all their time were spent in pleasurable leisure activities. ... At the policy level an implication is that too many work hours, without sufficient free time or vacation, will prove less rewarding for most people” (Diener, Weiting Ng and Will Tov, 2008, ‘Balance in life and declining marginal utility of diverse resources’, Applied Research Quality Life).

This quote is from the conclusions of an article which assesses how average happiness levels differ with differing amounts of time spent in various ways (free time, with family and friends, and commuting) as well as with income levels. The findings seem to confirm the predictions of standard economic thinking in this area i.e. as our consumption of any good (including non-market goods such as leisure) rises the marginal utility of adding an additional unit of the good tends to decline.

What does the article tell us about marginal utility? The part of the study that seems most informative uses data from the Gallup World Poll, a representative sample of people almost covering about 95 percent of the world. As its main measure of happiness the study uses affect balance, which measures relative experience of positive feelings (enjoyment, and smiling and laughing) and negative feelings (depression, anger, sadness and worry) for the previous day.

The results suggest that the marginal utility of “free time” and “time with family and friends” is quite high for the first few hours of each activity (in the time category zero to four hours) and then declines to around zero. The marginal utility of additional income rises steeply for incomes up to around $US 40, 000 and then increases moderately, if at all. (The ladder of life indicator shows a similar pattern, but with the marginal utility of income remaining positive at high income levels).

How much additional income would a person need to earn to compensate for the loss of utility associated with the sacrifice of an hour of free time or an hour with family or friends. My rough calculation suggests that the hourly rate of pay required would be around $28 for a person with an income of around $20, 000 per year. (The loss in utility for sacrifice of an hour of leisure equals 0.075. Income on the preceding day would have needed to rise by $28 in order to raise utility by 0.075.)

For people with higher incomes, the hourly wage rate needed to compensate for the loss of an hour of leisure time would be very much higher. At first sight it might appear that with incomes in excess of around $60,000 the hourly rate of pay required to compensate for sacrifice of an hour of leisure would be huge. We need to remember, however, that some of the people earning this additional income might be saving it to spend at times of their lives when their earning capacity is diminished and the marginal utility of additional income is much higher. There are also some people who enjoy their work so much that they would not require any compensation for sacrificing an hour of free time. More research is required before we will have a good understanding of why people make the choices they make between income and leisure.

The quote at the beginning of this article suggests that the choice that individuals make between income and leisure is a government policy issue. Why should it be? The weight of evidence suggests that when governments attempt to regulate how people live their lives they tend to make people more miserable rather than happier. As I see it, the main benefit of research of this kind is that the findings may help individuals to improve their own well-being and that of their families by enabling them to make better choices.

Can we use dollars to compare how much various life events affect well-being?

The life events I propose to discuss here are things like major improvements or worsening in financial situation, getting married or divorced, having a child, serious personal injury, death of a spouse, being made redundant and change of residence. I will focus on subjective well-being, as measured by surveys which ask people for a numerical rating of their satisfaction with life.

One way to compare the impact of life events on well-being is to calculate what change in income would have an equivalent impact after controlling for other factors. Some readers might recall research findings for the U.S. and Britain which suggested that the increased income equivalent of a lasting marriage is around $100,000 and an increase in income of around $60,000 would be required to compensate for the loss in well-being associated with becoming unemployed. (These numbers come from some pioneering research by David Blanchflower and Andrew Oswald published in 2000.)

There are several problems with the methodology of this early research which tend to overstate the income changes equivalent to life events. First, the methodology is based on estimates of the (small) impact that higher incomes have on current well-being without taking account of the impact of higher incomes on future well-being. Higher incomes enable the wealth accumulation (and the redistributions through tax and welfare systems) that make it possible for people to maintain their well-being during periods when earning potential is diminished (e.g. during retirement) or when they incur heavy costs or heavy costs are incurred on their behalf (e.g. education and medical expenses).

Second, the methodology focused on the impact of being in a particular state (e.g. married or unmarried) rather than on the duration or timing of the effects that life events have on well-being. Life events typically have large impacts on life satisfaction for only a relatively short period.

Third, the methodology was unable to distinguish causation. For example, it was unable to assess whether married people are happier than unmarried people because marriage tends to make people happy or because happy people are more likely to get married.

Research in this area has progressed a great deal in recent years, with the use of ongoing surveys that enable changes in the well-being of the same sample of people to be linked over time to life events. The HILDA survey (Australian data) shows that the events with the greatest positive effect on life satisfaction for both males and females included a major financial improvement in the past three months, having been married in the last three months and birth of a child (less than nine months ago). The events with greatest negative effect on life satisfaction included being detained in jail, a major financial worsening at any time in the last year, a recent separation from a spouse or partner and recent death of a relative or family member.

A recent paper by Paul Frijters, David Johnston and Michael Shields estimates the one-off windfall improvement in finances needed to compensate for various life events (‘Happiness dynamics with quarterly life event data’, DP 3604, IZA, July 2008). The windfall approach seems preferable because a comparison of the effects on current well-being of different life events avoids the conceptual and measurement problems of attempting to compare the effects of life events with the effects of differences in income levels.

The authors obtained the following estimates of compensating windfall financial gains for various life events:

Death of spouse/ child: + $178, 300
Serious personal injury or illness: + $ 59,200
Change of residence: - $ 53,000
Birth or adoption of child: - $ 18,300
Marriage - $ 16,500
Separation from spouse or partner: +$ 14,900
Fired or made redundant: + $ 6,900
Victim of property crime: +$ 2,700

(Currency: Australian dollars; $A1 = about $US 0.80. Assumed discount rate = 5% ) .

I should note that these compensating windfall estimates are additive. For example, a person who is fired might become separated from his or her spouse and experience a major financial worsening at the same time.

It seems to me that the magnitude of these estimated compensating windfalls generally make a lot more sense than do the much larger estimates of income-equivalents of life events. Nevertheless, I feel uneasy about the idea that the life satisfaction of people who suffer the death of a spouse or child would be unaffected, on average, if they received a windfall gain of around $A 178,300 at the same time. Can any amount of monetary compensation actually be sufficient to enable life satisfaction to remain unaffected while a person is mourning the loss of a loved one?

Do well-being surveys measure utility?

Economists often think of utility and well-being as the same thing. If a person chooses to buy an additional unit of good A rather than an additional unit of good B, they tend to assert that this “revealed preference” shows that the marginal utility provided by good A exceeds that provided by good B. If asked to explain what this means in simple terms an economist might say that the additional unit of good A increases the person’s well-being by more than an additional unit of good B.

At this point some readers will immediately want to bring in complications like the possibility of irrational behaviour. A branch of economics (behavioral economics) explores this possibility, but I want to put this possibility aside for the moment.

The question I want to focus on is whether well-being surveys that are conducted by asking people questions relating to their personal well-being are measuring the well-being or utility referred to by economists. Some economists assume that it is, but I think they are mistaken.

What is it that the surveys actually measure? They measure a variety of different things. Most commonly they measure happiness or satisfaction with life by asking people to provide numerical evaluations in response to a single question. Some more complex surveys (e.g. the ACQOL survey) measure perceptions of the quality of life by asking questions about satisfaction with various aspects of life such as standard of living, achievements, relationships and health. Others ( e.g. nef’s “National accounts of wellbeing”) incorporate a framework of questions relating to life evaluations, emotional well-being, vitality, resilience and self-esteem, and feelings of autonomy and competence etc.

I think it is fair to say, however, that the surveys measure how people feel about their current lives. (Some do include questions about future security but when this averaged with other factors most weight is given to how people feel about their current lives.) For the purposes of this discussion let us call this “current well-being” and assume that the surveys measure it accurately.

At this point the economists reading this will immediately recognize that the surveys cannot be measuring utility because people often make trade-offs between their current well-being and future well-being. This is most obvious in savings decisions where current consumption may be sacrificed to enable a higher consumption levels to be enjoyed in future. It also occurs, for example, when people decide to put up with working long hours or spending a lot of time commuting in order to make their families more financially secure.

Economists still probably learn at an early stage of their study of the subject how to picture these kinds of choices in their minds, but for the benefit of anyone else who might be reading this I will draw a relevant diagram below. Readers who prefer stories to diagrams might prefer to read an earlier post, entitled “Do good decisions always make us happy?”. For the benefit of any readers who might find an appeal to authority more persuasive I should also mention that Gary Becker and Luis Rayo have suggested that the happiness measured in surveys can be viewed as “a commodity in the utility function in the same way that owning a car and being healthy are” (comment on Stevenson/Wolfers paper, Brookings Papers, Spring 2008: 89).


The possibilities curve in this diagram (shown in red) encompasses the various combinations of “current well-being” and “security” that are attainable by the decision-maker. It can easily be seen that points on this curve are superior to all attainable points closer to the origin.

The indifference curves (shown in blue) reflect the preferences of the decision-maker between current well-being and security. The decision-maker is indifferent between the combinations of “current well-being” and “security” on particular curves. She maximizes her utility at the point of tangency between the possibilities curve and the highest attainable indifference curve.

The point I am trying to make is that as a result of the decision-maker’s preferences she views point A, where current wellbeing is at a maximum, as inferior to point B, the point at which utility is maximized.

The obvious implication is that it is foolish to rush into policy recommendations based solely on consideration of how people can improve their well-being as measured in surveys. If happiness surveys suggest that people are behaving in ways that are contrary to measured well-being we should ask ourselves whether we have an adequate understanding of what is motivating their behavior, rather than assuming that it is a result of ignorance (an information problem) or human frailty (predictable irrationality).