Are Comparisons Luxuries? Subjective Poverty and Positional Concerns in Indonesia

Jinan Zeidan ()
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Jinan Zeidan: Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS, http://www.greqam.fr/en/users/zeidan

No 1505, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: We explore (i) the usual determinants of happiness in Indonesia, with a special focus on the role of various measures of absolute income; (ii) the presence of relativistic concerns or positive external effects in shaping attitudes to subjective well-being; and (iii) whether this potential effect changes sign with income level. Additional evidence offered by our investigation relates to the effect of past income levels as well as to that of aspirations. In line with other literature from poor contexts, we find that the subjective well-being of Indonesians is positively affected by the comparison with the income of people around them. This positive influence is unambiguously more important for the poor than for the rich. This pattern is consistent through different measures of well-being and holds also when accounting for past income levels, and lagged income expectations.

Keywords: Indonesia; subjective well-being; external effects; positional concerns (search for similar items in EconPapers)
JEL-codes: I30 I31 O12 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2015-02
New Economics Papers: this item is included in nep-hap, nep-ltv and nep-sea
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Citations: View citations in EconPapers (1)

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