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Isolation and Subjective Welfare

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Author Info
Fafchamps, Marcel
Shilpi, Forhad

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

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Find related papers by JEL classification:
D60 - Microeconomics - - Welfare Economics - - - General
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
R20 - Urban, Rural, and Regional Economics - - Household Analysis - - - General

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fafchamps, Marcel & Shilpi, Forhad, 2006. "Subjective Welfare, Isolation and Relative Consumption," CEPR Discussion Papers 6002, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Nathalie Francken & Bart Minten & Johan F.M. Swinnen, 2005. "The Impact of Media and Monotoring on Corruptin in Decentralized Public Programs: Evidence from Madagascar," LICOS Discussion Papers 15505, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
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