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Isolation and Subjective Welfare

  • Fafchamps, Marcel
  • Shilpi, Forhad

Using detailed geographical and household survey data from Nepal, this article investigates the relationship between isolation and subjective welfare. This is achieved by examining how distance to markets and proximity to large urban centers affect responses to questions about income and consumption adequacy. Results show that isolation significantly reduce subjective assessments of income and consumption adequacy, even after controlling for consumption expenditures and other factors. Part of this effect can be attributed to lower access to public goods and to a reduction in the variety of consumption items. Equivalent variation estimates suggest that the subjective cost of isolation is large but also that the gain from reduced isolation is largest for households already close to markets.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6001.

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Date of creation: Dec 2006
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Handle: RePEc:cpr:ceprdp:6001
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  11. Marcel Fafchamps & Agnes R. Quisumbing, 2000. "Social Roles, Human Capital, and the Intrahousehold Division of Labour: Evidence from Pakistan," Economics Series Working Papers 11, University of Oxford, Department of Economics.
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  23. Deaton, Angus, 1991. "Saving and Liquidity Constraints," Econometrica, Econometric Society, vol. 59(5), pages 1221-48, September.
  24. Fafchamps, Marcel & Shilpi, Forhad, 2002. "The spatial division of labor in Nepal," Policy Research Working Paper Series 2845, The World Bank.
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  38. Fafchamps, Marcel & Quisumbing, Agnes R., 1999. "Social roles, human capital, and the intrahousehold division of labor," FCND discussion papers 73, International Food Policy Research Institute (IFPRI).
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