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Isolation and Subjective Welfare

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  • Fafchamps, Marcel
  • Shilpi, Forhad

Abstract

Using detailed geographical and household survey data from Nepal, this article investigates the relationship between isolation and subjective welfare. This is achieved by examining how distance to markets and proximity to large urban centers affect responses to questions about income and consumption adequacy. Results show that isolation significantly reduce subjective assessments of income and consumption adequacy, even after controlling for consumption expenditures and other factors. Part of this effect can be attributed to lower access to public goods and to a reduction in the variety of consumption items. Equivalent variation estimates suggest that the subjective cost of isolation is large but also that the gain from reduced isolation is largest for households already close to markets.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6001.

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Date of creation: Dec 2006
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Handle: RePEc:cpr:ceprdp:6001

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Keywords: consumption adequacy; geographical isolation; subjective well-being;

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Citations

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Cited by:
  1. Fafchamps, Marcel & Shilpi, Forhad, 2006. "Subjective Welfare, Isolation and Relative Consumption," CEPR Discussion Papers 6002, C.E.P.R. Discussion Papers.
  2. Asadullah, Niaz & Chaudhury, Nazmul, 2012. "Subjective Well-Being and Relative Poverty in Rural Bangladesh," IZA Discussion Papers 6569, Institute for the Study of Labor (IZA).
  3. Marcel Fafchamps & Forhad Shilpi, 2013. "Determinants of the Choice of Migration Destination," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(3), pages 388-409, 06.
  4. Francken, Nathalie & Minten, Bart & Swinnen, Johan F.M., 2009. "Media, Monitoring, and Capture of Public Funds: Evidence from Madagascar," World Development, Elsevier, vol. 37(1), pages 242-255, January.
  5. Charles Kenny, 2011. "Bentham from the Crypt Once More: Politicians in Pursuit of Happiness," Working Papers id:4332, eSocialSciences.
  6. Guillen-Royo, Monica, 2011. "Reference group consumption and the subjective wellbeing of the poor in Peru," Journal of Economic Psychology, Elsevier, vol. 32(2), pages 259-272, March.

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