merging 2010 and 2011 data together to allow for a larger number of observations, a total of 3,009.<sup>4</sup> While panel data has much utility in helping to explain patterns of subjective wellbeing among the same respondents over time, and allows for controls of unobservable traits that are distinct to individuals such as naturally cheerful or curmudgeonly dispositions, it is difficult to find. The cross-sectional data from LAPOP is particularly rich in detail and, among other things, queries the respondents about levels of subjective wellbeing two years ago, allowing for an exploration of perceived changes in levels over time. Genes and personality remain ‘unobserved’ in our cross-section, at least for the analysis at one point of time. We then analyze perceived changes in the same respondents over time. We recognize that the findings, in addition to reflecting actual changes in wellbeing levels, may be correlated with unobservable personality traits and/or affected by recall bias.<sup>5</sup> Accepting these potential limitations, we felt it worth the opportunity that we have to analyze reported changes in wellbeing, controlling for the usual socio-economic and demographic traits in the crosssection while analyzing a much broader range of potential determinants as well.

We use a question in the survey about the worst and best possible life as our measure of wellbeing. This question was originally introduced by sociologist Howard Cantril and is broadly known as the Cantril ladder question. For the survey, respondents are given a card with a picture of a ladder with steps numbered 0 to 10 that have equal distances, 0 being the lowest step and representing _the worst life possible_ while 10 being the highest step and representing _the best life possible_ . They are then asked ‘on what step of the ladder do you feel these days?’<sup>6</sup> This helped to counter potentially different conceptions of a 0-10 ordinal scale and relative differences between the numbers. Thus when we refer to subjective wellbeing scores in this analysis, we are referring to answers to the best life possible question, rather than to life satisfaction or happiness questions, which, although similar, are more open-ended and correlate less consistently with income than does the best possible life question.<sup>7</sup> There is a large literature cited throughout this paper on the theory and empirical determinants of subjective wellbeing, and in its various dimensions (evaluative and hedonic). Our objective in this paper is to build on that existing literature, but focus distinctly on external factors which are particularly relevant in Colombia and Latin America, and which can be influenced by policy. While, as such, our objectives may appear narrow, we hope that they are directly relevant to policy discussions and we understand the limitations of what can be achieved in a single study.

Thus, although _personal factors_ are important correlates of subjective wellbeing (age and family relations, for example) and we take those into account in our paper, our primary

> 4 This is a common approach in the literature, see also LAPOP reports.

> 5 See Kahneman _et al._ 2004; Peeters _et al._ 2012.

> 6 This definition is possibly the most widely applied in the literature, also by Gallup World Poll, and uses Cantril’s self-anchoring scale, see Figure 4 in the annex. Respondents are asked this question at the beginning of the survey so that their responses are not influenced by other questions later in the survey. It is worth noting that this definition allows some degree of openness among respondents, some of whom may have contentment in mind while others the overall concept of their lives and opportunities (Graham 2010). This paper therefore assesses subjective wellbeing in its evaluative sense which does not necessarily reflect changes in one’s daily emotional state and which (as the analysis shows) is very closely linked to life’s objective circumstances. For a discussion on the methodology behind the use of happiness indicators, see for example: Helliwell and Wang 2012.

> 7 See Graham 2011.

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