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Isolation and Subjective Welfare

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Author Info
Marcel Fafchamps
Forhad Shilpi, The World Bank

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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. Controlling for migration, results show that isolation significantly reduce subjective assessments of income and consumption adequacy. Part of this effect can be attributed to lower access to public goods and to a reduction in the variety of consumption items. Compensating variation estimates suggest that the subjective cost of isolation is large. We also find strong evidence that Nepalese households cannot relocate costlessly out of their village of origin.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 216.

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Date of creation: 2004
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Handle: RePEc:oxf:wpaper:216

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Keywords: Geographical Isolation Subjective Well-Being Migration

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Find related papers by JEL classification:
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses
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)
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  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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