Relative standing and subjective well-being in South Africa: The role of perceptions, expectations and income mobility
AbstractMost studies that explore the impact of relative standing on subjective well-being use objective measures of the individualâ€™s relative position, such as the mean income of the reference group or the individualâ€™s ranking in the relevant income distribution. In this paper, using a new household survey from South Africa, we are able to derive subjective measures of relative standing, as information is collected on individualsâ€™ perceptions of where they rank in the income distribution. We find considerable differences between objective and subjective measures of an individualâ€™s relative ranking. Furthermore, our results suggest that an individualâ€™s perceived relative status has a significantly larger effect on subjective well-being than objective measures of relative status based on reported income. We also examine the effects on subjective well-being of how individuals perceive their relative position in the income distribution to have changed since childhood, and what they expect their relative position to be in the future. We find that future upward mobility has a smaller effect than upward mobility compared to oneâ€™s past, suggesting that life satisfaction is influenced more by what has been achieved than by anticipated achievements.
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Bibliographic InfoPaper provided by Economic Research Southern Africa in its series Working Papers with number 210.
Length: 28 pages
Date of creation: 2011
Date of revision:
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More information through EDIRC
subjective well-being; relative standing; perceptions; expectations; income mobility; South Africa;
Find related papers by JEL classification:
- I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-04-09 (Africa)
- NEP-ALL-2011-04-09 (All new papers)
- NEP-DEV-2011-04-09 (Development)
- NEP-HAP-2011-04-09 (Economics of Happiness)
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