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Does Relative Income Matter for the Very Poor? Evidence from Rural Ethiopia

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Author Info
Akay, Alpaslan () (IZA)
Martinsson, Peter () (University of Gothenburg)

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Abstract

We studied whether relative income has an impact on subjective well-being among extremely poor people. Contrary to the findings in developed countries, where relative income has shown a significant and negative impact on subjective well-being, we cannot reject the hypothesis that relative income has no impact on subjective well-being in rural areas of northern Ethiopia.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3812.

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Length: 12 pages
Date of creation: Nov 2008
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Handle: RePEc:iza:izadps:dp3812

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Related research
Keywords: absolute income; relative income; subjective well-being;

Other versions of this item:

Find related papers by JEL classification:
D10 - Microeconomics - - Household Behavior - - - General
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty

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References listed on IDEAS
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  1. David G. Blanchflower & Andrew J. Oswald, 2000. "Well-Being Over Time in Britain and the USA," NBER Working Papers 7487, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June. [Downloadable!] (restricted)
  3. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    Other versions:
  4. John Knight & Lina Song & Ramani Gunatilaka, 2007. "Subjective Well-being and its Determinants in Rural China," Economics Series Working Papers 334, University of Oxford, Department of Economics. [Downloadable!]
  5. Alpizar, Francisco & Carlsson, Fredrik & Johansson-Stenman, Olof, 2005. "How much do we care about absolute versus relative income and consumption?," Journal of Economic Behavior & Organization, Elsevier, vol. 56(3), pages 405-421, March. [Downloadable!] (restricted)
    Other versions:
  6. Fafchamps, Marcel & Shilpi, Forhad, 2008. "Subjective welfare, isolation, and relative consumption," Journal of Development Economics, Elsevier, vol. 86(1), pages 43-60, April. [Downloadable!] (restricted)
    Other versions:
  7. J. Solnick, Sara & Hemenway, David, 1998. "Is more always better?: A survey on positional concerns," Journal of Economic Behavior & Organization, Elsevier, vol. 37(3), pages 373-383, November. [Downloadable!] (restricted)
  8. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July. [Downloadable!] (restricted)
  9. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June. [Downloadable!] (restricted)
  10. Erzo F.P. Luttmer, 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," NBER Working Papers 10667, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Olof Johansson-Stenman & Fredrik Carlsson & Dinky Daruvala, 2002. "Measuring Future Grandparents" Preferences for Equality and Relative Standing," Economic Journal, Royal Economic Society, vol. 112(479), pages 362-383, April. [Downloadable!] (restricted)
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