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Relative deprivation and individual well-being

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  • Xi Chen

    (Yale University, USA, and IZA, Germany)

Abstract

People who are unable to maintain the same standard of living as others around them experience a sense of relative deprivation that has been shown to reduce feelings of well-being. Relative deprivation reflects conditions of worsening relative poverty despite striking reductions in absolute poverty. The effects of relative deprivation explain why average happiness has been stagnant over time despite sharp rises in income. Consumption taxes on status-seeking spending, along with official and traditional sanctions on excess consumption and redistributive policies may lessen the negative impact of relative deprivation on well-being.

Suggested Citation

  • Xi Chen, 2015. "Relative deprivation and individual well-being," IZA World of Labor, Institute for the Study of Labor (IZA), pages 140-140, April.
  • Handle: RePEc:iza:izawol:journl:y:2015:n:140
    as

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    References listed on IDEAS

    as
    1. Christine Eibner & William N. Evans, 2005. "Relative Deprivation, Poor Health Habits, and Mortality," Journal of Human Resources, University of Wisconsin Press, vol. 40(3).
    2. Angus Deaton, 2001. "Relative Deprivation, Inequality, and Mortality," NBER Working Papers 8099, National Bureau of Economic Research, Inc.
    3. repec:pri:cheawb:deaton_relative_deprivation is not listed on IDEAS
    4. Chen, Xi & Zhang, Xiaobo, 2012. "Costly posturing: relative status, ceremonies and early child development in China:," IFPRI discussion papers 1206, International Food Policy Research Institute (IFPRI).
    5. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    6. Eiji Mangyo & Albert Park, 2011. "Relative Deprivation and Health: Which Reference Groups Matter?," Journal of Human Resources, University of Wisconsin Press, vol. 46(3), pages 459-481.
    7. Verme, Paolo, 2009. "Happiness, Deprivation and the Alter Ego," IRISS Working Paper Series 2009-18, IRISS at CEPS/INSTEAD.
    8. Ori Heffetz, 2011. "A Test of Conspicuous Consumption: Visibility and Income Elasticities," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1101-1117, November.
    9. Ana I. Balsa & Michael T. French & Tracy L. Regan, 2014. "Relative Deprivation and Risky Behaviors," Journal of Human Resources, University of Wisconsin Press, vol. 49(2), pages 446-471.
    10. Shlomo Yitzhaki, 1979. "Relative Deprivation and the Gini Coefficient," The Quarterly Journal of Economics, Oxford University Press, vol. 93(2), pages 321-324.
    11. Chen, Xi, 2013. "Relative Deprivation in China," MPRA Paper 48582, University Library of Munich, Germany.
    12. repec:unu:wpaper:wp2012-70 is not listed on IDEAS
    13. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Ravallion,Martin & Chen,Shaohua, 2017. "Welfare-consistent global poverty measures," Policy Research Working Paper Series 8170, The World Bank.
    2. Xin Zhang & Xiaobo Zhang & Xi Chen, 2015. "Happiness in the Air: How does a Dirty Sky Affect Subjective Well-Being?," Working Papers id:7598, eSocialSciences.
    3. Luca Zanin, 2016. "On Italian Households’ Economic Inadequacy Using Quali-Quantitative Measures," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 59-88, August.

    More about this item

    Keywords

    relative status; relative poverty; relative deprivation; health; happiness; well-being;

    JEL classification:

    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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