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Who cares about relative deprivation?


  • Ravallion, Martin
  • Lokshin, Michael


If relative deprivation matters to welfare in poor countries as much as it apparently does in rich ones then one would have to question the priority given to economic growth over redistribution in current development policies. We look for evidence in one of the world's poorest countries, Malawi. Using new survey questions that help address likely biases in past tests, we find that relative deprivation is not the dominant concern for most of our sample, although it is for the comparatively well off, including in urban areas. Our results strengthen the welfarist case for a policy focus on absolute levels of living in poor countries. The pattern of externalities suggests that there will be too much poverty and inequality from the point of view of aggregate efficiency.

Suggested Citation

  • Ravallion, Martin & Lokshin, Michael, 2010. "Who cares about relative deprivation?," Journal of Economic Behavior & Organization, Elsevier, vol. 73(2), pages 171-185, February.
  • Handle: RePEc:eee:jeborg:v:73:y:2010:i:2:p:171-185

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    More about this item


    Poverty Relative deprivation Externalities Subjective welfare Malawi;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation


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