Inequality at the Doorstep: How objective and subjectively perceived relative deprivation among door-to-door neighbors impact subjective well-being

This study investigates how objective and subjectively perceived relative deprivation among door-to-door neighbors shape subjective well-being. Drawing on unique geocoded, longitudinal data from Switzerland, this paper introduces a novel, geographically informed measure of objective relative deprivation. Building on directed acyclic graphs (DAGs), it explicitly tests the mechanisms that link objective and subjectively perceived relative deprivation to subjective well-being, measured as people's life satisfaction. Doing so, we find little evidence for a negative effect of objective relative deprivation. Meanwhile, subjectively perceived relative deprivation among neighbors decreases subjective well-being in a non-linear fashion, stressing the importance of perceived relative losses over relative gains. These results are then also confirmed in robustness analyses using, among others, spatial Durbin and SLX models. Overall, the results suggest that relative deprivation also works at a geographically small, well-defined level, although it does not seem to be a key determinant of subjective well-being in this context.