Poverty and psychological distress in Latin America

The objective of this paper is three-fold: first, to study the psychological distress of the Latin American poor. Second, to study differences in psychological distress between the poor and the relatively wealthy in Latin America. Third, to study how economic growth impacts the psychological well-being of the poor. This paper uses micro-level information from the Gallup 2007 Survey for 16 Latin American countries to study psychological distress of the poor in Latin America; the survey is representative at the country level. The investigation works with approximately 12,500 observations. Psychological distress is measured on the basis of a set of questions regarding a person's emotional situation the day before he/she answered the questionnaire. The investigation finds out that the poor show greater psychological distress than the wealthy and that the gap is statistically significant. However, it would be inappropriate to attempt predicting a person's psychological well-being on the basis of his/her poverty condition alone, since many factors affect people's psychological well-being. The paper also shows that rapid economic growth seems to be detrimental to the psychological well-being of the poor, and that the impact of economic growth on psychological well-being differs between the poor and the relatively wealthy.