Are Comparisons Luxuries? Subjective Poverty and Positional Concerns in Indonesia

Jinan Zeidan
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Jinan Zeidan: GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique

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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)
Date: 2015-02
New Economics Papers: this item is included in nep-hap, nep-ltv and nep-sea
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