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Empathy and Emulation: Life Satisfaction and the Urban Geography of Comparison Groups

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  • Christopher P. Barrington-Leigh
  • John F. Helliwell

Abstract

Departures from self-centred, consumption-oriented decision making are increasingly common in economic theory and are well motivated by a wide range of behavioural data from experiments, surveys, and econometric inference. A number of studies have shown large negative externalities in individual subjective well-being due to neighbours' incomes. These reflect the role of nearby households as comparison groups acting in individuals' reference-dependent preferences over income or consumption. At the same time, there are many reasons to expect positive spillovers from having prosperous neighbours. We combine high-resolution geographic data from three Canada-wide social surveys and the 2001 census to disentangle the spatial pattern of reference groups in urban areas and to identify channels of positive and negative spillovers on life satisfaction. We find evidence of significant effects of others' income at different scales and are able to reject a number of alternative explanations for the findings.

Suggested Citation

  • Christopher P. Barrington-Leigh & John F. Helliwell, 2008. "Empathy and Emulation: Life Satisfaction and the Urban Geography of Comparison Groups," NBER Working Papers 14593, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14593
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Andrew E. Clark & Conchita D'Ambrosio, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," Working Papers halshs-00967938, HAL.
    2. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute for the Study of Labor (IZA).
    3. Peter Burton & Shelley Phipps, 2011. "Families, Time, and Well-Being in Canada," Canadian Public Policy, University of Toronto Press, vol. 37(3), pages 395-423, September.
    4. Abel Brodeur & Sarah Flèche, 2013. "Where the Streets Have a Name: Income Comparisons in the US," CEP Discussion Papers dp1196, Centre for Economic Performance, LSE.
    5. Abel Brodeur & Sarah Flèche, 2013. "Where the Streets Have a Name: Income Comparisons in the US," Working Papers halshs-00795198, HAL.
    6. Stefano Bartolini & Ennio Bilancini & Maurizio Pugno, 2013. "Did the Decline in Social Connections Depress Americans’ Happiness?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(3), pages 1033-1059, February.
    7. Becchetti, Leonardo & Castriota, Stefano & Corrado, Luisa & Ricca, Elena Giachin, 2013. "Beyond the Joneses: Inter-country income comparisons and happiness," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 187-195.
    8. Hajdu, Tamás & Hajdu, Gábor, 2011. "A hasznosság és a relatív jövedelem kapcsolatának vizsgálata magyar adatok segítségével
      [Examining the relation of utility and relative income using Hungarian data]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 56-73.
    9. John F. Helliwell & Christopher P. Barrington-Leigh & Anthony Harris & Haifang Huang, 2009. "International Evidence on the Social Context of Well-Being," NBER Working Papers 14720, National Bureau of Economic Research, Inc.
    10. Abel Brodeur & Sarah Flèche, 2017. "Neighbors' Income, Public Goods and Well-Being," Working Papers 1719E, University of Ottawa, Department of Economics.
    11. Feng Hou, 2014. "Keep Up with the Joneses or Keep on as Their Neighbours: Life Satisfaction and Income in Canadian Urban Neighbourhoods," Journal of Happiness Studies, Springer, vol. 15(5), pages 1085-1107, October.
    12. 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.
    13. Eaton, B. Curtis & Matheson, Jesse A., 2013. "Resource allocation, affluence and deadweight loss when relative consumption matters," Journal of Economic Behavior & Organization, Elsevier, vol. 91(C), pages 159-178.

    More about this item

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • H0 - Public Economics - - General
    • J0 - Labor and Demographic Economics - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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