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Isolation and Subjective Welfare

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  • Marcel Fafchamps
  • Forhad Shilpi

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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Bibliographic Info

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: 01 Dec 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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Citations

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Cited by:
  1. Fafchamps, Marcel & Shilpi, Forhad, 2009. "Determinants of the Choice of Migration Destination," CEPR Discussion Papers 7407, C.E.P.R. Discussion Papers.
  2. Asadullah, Mohammad Niaz & Chaudhury, Nazmul, 2012. "Subjective well-being and relative poverty in rural Bangladesh," Journal of Economic Psychology, Elsevier, vol. 33(5), pages 940-950.
  3. Fafchamps, Marcel & Shilpi, Forhad, 2008. "Subjective welfare, isolation, and relative consumption," Journal of Development Economics, Elsevier, vol. 86(1), pages 43-60, April.
  4. 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.
  5. Charles Kenny, 2011. "Bentham from the Crypt Once More: Politicians in Pursuit of Happiness," Working Papers id:4332, eSocialSciences.
  6. 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.

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