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The Role of Visible Wealth for Deprivation

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  • Veronika Bertram-Hümmer
  • Ghassan Baliki

Abstract

Motivated by the lack of literature linking actual to perceived relative deprivation, this paper assesses the role of visibility in goods and assets vis-à-vis income behind perceptions of relative deprivation. We rely on household survey data that include unique information on reported perceived deprivation with a pre-specified reference group, namely others in the same town or village. Based on a large number of asset and consumption items, we create an index of visible wealth by aggregating visible goods and assets using principal component weights. We show that relative deprivation in visible wealth has a significantly stronger effect than income in determining levels of perceived relative deprivation. The finding is robust under various sensitivity checks and for a number of controls. Our result sheds light on the importance of the visibility of the objects of comparison on an individual’s assessment of the own relative economic situation and proposes that future research should not only rely on income-based deprivation measures. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Veronika Bertram-Hümmer & Ghassan Baliki, 2015. "The Role of Visible Wealth for Deprivation," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 124(3), pages 765-783, December.
    • Handle: RePEc:spr:soinre:v:124:y:2015:i:3:p:765-783
    DOI: 10.1007/s11205-014-0824-2
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    2. Lenka Mynaříková & Vít Pošta, 2023. "The Effect of Consumer Confidence and Subjective Well-being on Consumers’ Spending Behavior," Journal of Happiness Studies, Springer, vol. 24(2), pages 429-453, February.
    3. Punarjit Roychowdhury, 2018. "Visible consumption, relative deprivation, and health: evidence from a developing country," Economics Bulletin, AccessEcon, vol. 38(3), pages 1366-1380.
    4. Hortay, Olivér & Kökény, László & Stefkovics, Ádám, 2021. "A szubjektív energiaszegénység mérésének problémái Magyarországon [Problems with measuring subjective energy poverty in Hungary]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 753-772.
    5. Damir Esenaliev & Neil T. N. Ferguson, 2019. "The Impact of Job Quality on Wellbeing: Evidence from Kyrgyzstan," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(1), pages 337-378, July.
    6. Esposito, Lucio & Villaseñor, Adrián, 2017. "Relative deprivation: Measurement issues and predictive role for body image dissatisfaction," Social Science & Medicine, Elsevier, vol. 192(C), pages 49-57.
    7. Muna Shifa & Murray Leibbrandt, 2018. "Relative Economic Position and Subjective Well-Being in a Poor Society: Does Relative Position Indicator Matter?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(2), pages 611-630, September.

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    More about this item

    Keywords

    Relative deprivation; Visible wealth; Income; Comparison group; C23; C25; D31; I31; P3;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • P3 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions

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