Rural–Urban Differences in Subjective Well-Being for South Africa: Static and Dynamic Approaches

Mduduzi Biyase and Cephas Naanwaab
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Cephas Naanwaab: North Carolina A&T State University, USA

Journal of Economic Development, 2023, vol. 48, issue 1, 1-30

Abstract: While there is a well-documented positive relationship between income and life satisfaction, little research (if any) has examined this relationship for samples split by location (rural and urban areas) in South Africa. Using panel data from five waves of National Income Dynamics Study (NIDS) we track the subjective well-being of rural and urban households and estimate static and dynamic models of life satisfaction, which incorporate a range of independent variables (lagged subjective well-being, relative income and other control variables), and dependent variable (life satisfaction). Our findings reveal that, despite considerable differences between urban and rural households in terms of income, rural households report experiencing greater subjective well-being than urban households do. Furthermore, our results suggest that not only does own-income have a positive effect, comparison-income or relative income also positively affect subjective well-being.

Keywords: NIDS; Utility; Income; Emotional Health; Static Model (search for similar items in EconPapers)
JEL-codes: D30 D60 (search for similar items in EconPapers)
Date: 2023
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