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Does Relative Deprivation Matter in Developing Countries: Evidence from Six Transition Economies

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  • Alexandru Cojocaru

Abstract

Existing evidence on whether relative status is an important determinant of well-being has two key features: it is mainly derived from high income countries, and it relies on relative deprivation measures constructed by the researchers, rather than being reported by the respondents. The need to construct relative deprivation measures imposes strong assumptions with respect to obvervability of relative deprivation. This paper adds evidence on the importance of social comparisons based on self-reported relative status assessments, which obviates the need to impose observability assumptions. The underlying survey data has the added benefit of coming from six transition economies at different levels of economic development, making it possible to explore the role of social comparisons at low income levels. Interviewer’s observations of the household’s relative deprivation are also employed to address the endogeneity concerns associated with using self-reported relative status measures. The results suggest that relative deprivation is indeed a welfare-relevant concern, even in the poorest countries in Eastern Europe. Among multiple reference groups available in the data, local social comparisons appear to be most salient. Copyright Springer Science+Business Media Dordrecht 2016

Suggested Citation

  • Alexandru Cojocaru, 2016. "Does Relative Deprivation Matter in Developing Countries: Evidence from Six Transition Economies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(3), pages 735-756, February.
  • Handle: RePEc:spr:soinre:v:125:y:2016:i:3:p:735-756
    DOI: 10.1007/s11205-015-0864-2
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    More about this item

    Keywords

    Subjective well-being; Reference groups; Relative deprivation ; I32; O12;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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