Subjective welfare, isolation, and relative consumption

Marcel Fafchamps () and Forhad Shilpi

Journal of Development Economics, 2008, vol. 86, issue 1, pages 43-60

Abstract: The recent literature has shown that subjective welfare depends on relative income. Much of the existing evidence comes from developed economies. What remains unclear is whether this is a universal human trait or an artifact of a prosperous, market-oriented lifestyle. Using data from Nepal, a mountainous country where many households still live in relative isolation, we test whether poorer and more isolated households care less about relative consumption. We find that they do not. We investigate possible reasons for this. We reject that it is due to parental concerns regarding the marriage prospects of their children. But we find evidence in support of the reference point hypothesis put forth by psychologists: household heads having migrated out of their birth district still judge the adequacy of their consumption in comparison with households in their district of origin.

Date: 2008
View citations in EconPapers

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6VBV ... 8a4ded2252ea5fe4d7f8
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Subjective Welfare, Isolation and Relative Consumption (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:deveco:v:86:y:2008:i:1:p:43-60

Access Statistics for this article

Journal of Development Economics is edited by M. R. Rosenzweig

More articles in Journal of Development Economics from Elsevier
Series data maintained by Heidi Boesdal ().