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Are Comparisons Luxuries? Subjective Poverty and Positional Concerns in Indonesia

Listed author(s):
  • Jinan Zeidan

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille 2 - Université Paul Cézanne - Aix-Marseille 3 - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

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    We explore (i) the usual determinants of happiness in Indonesia, with a special focus on the role of various measures of absolute income; (ii) the presence of relativistic concerns or positive external effects in shaping attitudes to subjective well-being; and (iii) whether this potential effect changes sign with income level. Additional evidence offered by our investigation relates to the effect of past income levels as well as to that of aspirations. In line with other literature from poor contexts, we find that the subjective well-being of Indonesians is positively affected by the comparison with the income of people around them. This positive influence is unambiguously more important for the poor than for the rich. This pattern is consistent through different measures of well-being and holds also when accounting for past income levels, and lagged income expectations.

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    Paper provided by HAL in its series Working Papers with number halshs-01114396.

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    Date of creation: Feb 2015
    Handle: RePEc:hal:wpaper:halshs-01114396
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01114396
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