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Where Should We Live?

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  • Andrew E. Clark

    (Paris School of Economics and IZA)

Abstract

One of the central topics in recent empirical work on subjective well-being is that of comparisons to a reference group, over a variety of domains of economic and social life. One such reference group is neighbours. Any resulting spatial spillovers that are identified have potential implications for the welfare-mamixising degree of spatial segregation. In this paper, we summarize some recent findings with respect to geographical comparisons of income, unemployment, health and religion, and present some new results regarding spatial spillovers in marriage. The resulting predictions regarding spatial segregation differ sharply according to the domain under consideration. While work in this area remains very preliminary, subjective well-being data may well help to both identify spillovers from neighbours, and inform about individualsÕ location decisions.

Suggested Citation

  • Andrew E. Clark, 2010. "Where Should We Live?," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 2(1), pages 20-31, January.
    • Handle: RePEc:ren:journl:v:2:y:2010:i:1:p:20-31
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    1. Andrew Clark & Fabrice Etilé & Fabien Postel-Vinay & Claudia Senik & Karine Van der Straeten, 2005. "Heterogeneity in Reported Well-Being: Evidence from Twelve European Countries," Economic Journal, Royal Economic Society, vol. 115(502), pages 118-132, March.
    2. Rafael Di Tella & Robert J. MacCulloch & Andrew J. Oswald, 2003. "The Macroeconomics of Happiness," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 809-827, November.
    3. Albert O. Hirschman & Michael Rothschild, 1973. "The Changing Tolerance for Income Inequality in the Course of Economic DevelopmentWith A Mathematical Appendix," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(4), pages 544-566.
    4. Clark, Andrew & Knabe, Andreas & Rätzel, Steffen, 2010. "Boon or bane? Others' unemployment, well-being and job insecurity," Labour Economics, Elsevier, vol. 17(1), pages 52-61, January.
    5. Senik, Claudia, 2009. "Direct evidence on income comparisons and their welfare effects," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 408-424, October.
    6. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    7. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags And Leads in Life Satisfaction: a Test of the Baseline Hypothesis," Economic Journal, Royal Economic Society, vol. 118(529), pages 222-243, June.
    8. AndrewE. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2009. "Job Satisfaction and Co-worker Wages: Status or Signal?," Economic Journal, Royal Economic Society, vol. 119(536), pages 430-447, March.
    9. Hirschman, Albert O., 1973. "The changing tolerance for income inequality in the course of economic development," World Development, Elsevier, vol. 1(12), pages 29-36, December.
    10. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 963-1002.
    11. Bernard M. S. van Praag & Barbara E. Baarsma, 2005. "Using Happiness Surveys to Value Intangibles: The Case of Airport Noise," Economic Journal, Royal Economic Society, vol. 115(500), pages 224-246, January.
    12. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
    13. Felicia Huppert & Nic Marks & Andrew Clark & Johannes Siegrist & Alois Stutzer & Joar Vittersø & Morten Wahrendorf, 2009. "Measuring Well-being Across Europe: Description of the ESS Well-being Module and Preliminary Findings," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 91(3), pages 301-315, May.
    14. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    15. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July.
    16. Senik, Claudia, 2004. "When information dominates comparison: Learning from Russian subjective panel data," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2099-2123, August.
    17. Armin Falk & Markus Knell, 2004. "Choosing the Joneses: Endogenous Goals and Reference Standards," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 417-435, October.
    18. John F. Helliwell & Haifang Huang, 2010. "How's the Job? Well-Being and Social Capital in the Workplace," ILR Review, Cornell University, ILR School, vol. 63(2), pages 205-227, January.
    19. 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.
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    Cited by:

    1. Howley, P.; & Knight, S.;, 2018. "Taking pleasure from neighbours’ misfortune: Comparison effects, social norms and the well-being of the unemployed," Health, Econometrics and Data Group (HEDG) Working Papers 18/02, HEDG, c/o Department of Economics, University of York.

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    More about this item

    Keywords

    Comparisons; Spatial Spillovers; Income; Unemployment; Marriage; Health; Religion.;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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