Subjective Poverty and Reference-Dependence: Income over Time, Aspirations and Reference Groups

Carolina Castilla

No wp-2010-076, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: How a person assesses the wellbeing derived from income is often determined as much by its contrast with a reference point as by the level of income itself. In this paper, I use a household survey from Mexico to examine how subjective poverty assessments not only depend on the absolute level of income, but on how it compares to three reference points: the income of a reference group, the level of income that the individual aspired to have accomplished by the current stage of her life, and the income she had 3 years ago.

Keywords: Econometrics; Economic development; Poverty measurement (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (15)

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