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Community, Comparisons and Subjective Well-being in a Divided Society

Author

Listed:
  • Geeta Kingdon
  • John Knight

    () (Department of Economics, University of Oxford)

Abstract

Using a South African data set, the paper poses six questions about the determinants of subjective well-being. Much of the paper is concerned with the role of relative concepts. We find that comparator income – measured as average income of others in the local residential cluster – enters the household’s utility function positively but that income of more distant others (others in the district or province) enters negatively. The ordered probit equations indicate that, as well as comparator groups based on spatial proximity, race-based comparator groups are important in the racially divided South African society. It is also found that relative income is more important to happiness at higher levels of absolute income. Potential explanations of these results, and their implications, are considered.

Suggested Citation

  • Geeta Kingdon & John Knight, 2005. "Community, Comparisons and Subjective Well-being in a Divided Society," Working Papers 05095, University of Cape Town, Development Policy Research Unit.
  • Handle: RePEc:ctw:wpaper:05095
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    South Africa: poverty; well-being; absolute income; household’s utility function;

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

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