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Neighbors' Income, Public Goods, and Well‐Being

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  • Abel Brodeur
  • Sarah Flèche

Abstract

How does neighbors' income affect individual well‐being? Our analysis is based on rich U.S. local data from the Behavioral Risk Factor Surveillance System, which contains information on where respondents live and their self‐reported well‐being. We find that the effect of neighbors' income on individuals' self‐reported well‐being varies with the size of the neighborhood included. In smaller areas such as ZIP codes, we find a positive relationship between median income and individuals' life satisfaction, whereas it is the opposite at the county, MSA, and state levels. We provide evidence that local public goods and local area characteristics such as unemployment, criminality, and poverty rates drive the association between satisfaction and neighbors' income at the ZIP code level. The neighbors' income effects are mainly concentrated among poorer individuals and are as large as one quarter of the effect of own income on self‐reported well‐being.

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  • Abel Brodeur & Sarah Flèche, 2019. "Neighbors' Income, Public Goods, and Well‐Being," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(2), pages 217-238, June.
  • Handle: RePEc:bla:revinw:v:65:y:2019:i:2:p:217-238
    DOI: 10.1111/roiw.12367
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    Cited by:

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    2. Tiffany S. Neman, 2020. "Does Your Neighborhood’s Income Distribution Matter? A Multi-scale Study of Financial Well-Being in the U.S," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(3), pages 951-970, December.
    3. Thanasis Ziogas & Dimitris Ballas & Sierdjan Koster & Arjen Edzes, 2020. "How happy are my neighbours? Modelling spatial spillover effects of well-being," Papers 2007.11580, arXiv.org.
    4. John Ifcher & Homa Zarghamee & Dan Houser & Lina Diaz, 2020. "The relative income effect: an experiment," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1205-1234, December.
    5. Noy, Shakked & Sin, Isabelle, 2021. "The effects of neighbourhood and workplace income comparisons on subjective wellbeing," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 918-945.
    6. Zhijian Zhang & Xueyuan Wang, 0. "Ambition or Jealousy? It Depends on Whom you are Compared with," Journal of Happiness Studies, Springer, vol. 0, pages 1-27.
    7. Zhijian Zhang & Xueyuan Wang, 2021. "Ambition or Jealousy? It Depends on Whom you are Compared with," Journal of Happiness Studies, Springer, vol. 22(3), pages 1189-1215, March.

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    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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