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Neighbors' income, public goods, and well‐being

Abel Brodeur and Sarah Flèche ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: How does neighbors' income affect individual well‐being? Our analysis is based on rich U.S. local data from the Behavioral Risk Factor Surveillance System, which contains information on where respondents live and their self‐reported well‐being. We find that the effect of neighbors' income on individuals' self‐reported well‐being varies with the size of the neighborhood included. In smaller areas such as ZIP codes, we find a positive relationship between median income and individuals' life satisfaction, whereas it is the opposite at the county, MSA, and state levels. We provide evidence that local public goods and local area characteristics such as unemployment, criminality, and poverty rates drive the association between satisfaction and neighbors' income at the ZIP code level. The neighbors' income effects are mainly concentrated among poorer individuals and are as large as one quarter of the effect of own income on self‐reported well‐being.

Keywords: neighbors' income; public goods; amenities; relative deprivation; well‐being (search for similar items in EconPapers)
JEL-codes: C25 J01 R23 (search for similar items in EconPapers)
Date: 2018-04-06
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Published in Review of Income and Wealth, 6, April, 2018. ISSN: 0034-6586

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http://eprints.lse.ac.uk/87911/ Open access version. (application/pdf)

Related works:
Journal Article: Neighbors' Income, Public Goods, and Well‐Being (2019) Downloads
Working Paper: Neighbors' Income, Public Goods, and Well‐Being (2019)
Working Paper: Neighbors' Income, Public Goods and Well-Being (2017) Downloads
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