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Relative standing and subjective well-being in South Africa: The role of perceptions, expectations and income mobility

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  • Dorrit Posel
  • Daniela Casale

Abstract

Most studies that explore the impact of relative standing on subjective well-being use objective measures of the individual’s relative position, such as the mean income of the reference group or the individual’s ranking in the relevant income distribution. In this paper, using a new household survey from South Africa, we are able to derive subjective measures of relative standing, as information is collected on individuals’ perceptions of where they rank in the income distribution. We find considerable differences between objective and subjective measures of an individual’s relative ranking. Furthermore, our results suggest that an individual’s perceived relative status has a significantly larger effect on subjective well-being than objective measures of relative status based on reported income. We also examine the effects on subjective well-being of how individuals perceive their relative position in the income distribution to have changed since childhood, and what they expect their relative position to be in the future. We find that future upward mobility has a smaller effect than upward mobility compared to one’s past, suggesting that life satisfaction is influenced more by what has been achieved than by anticipated achievements.

Suggested Citation

  • Dorrit Posel & Daniela Casale, 2011. "Relative standing and subjective well-being in South Africa: The role of perceptions, expectations and income mobility," Working Papers 210, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:210
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    Cited by:

    1. Ferdi Botha & Frikkie Booysen, 2014. "Family Functioning and Life Satisfaction and Happiness in South African Households," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 119(1), pages 163-182, October.
    2. Talita Greyling & Fiona Tregenna, 2017. "Construction and Analysis of a Composite Quality of Life Index for a Region of South Africa," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(3), pages 887-930, April.
    3. Michael Rogan, 2016. "Gender and Multidimensional Poverty in South Africa: Applying the Global Multidimensional Poverty Index (MPI)," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(3), pages 987-1006, April.
    4. Ferdi Botha, 2014. "Life Satisfaction and Education in South Africa: Investigating the Role of Attainment and the Likelihood of Education as a Positional Good," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(2), pages 555-578, September.
    5. Alpaslan Akay & Lisa Andersson & Peter Martinsson & Haileselassie Medhin, 2014. "Positional Concerns among the Poor: Does Reference Group Matter? Evidence from Survey Experiments," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 23(5), pages 673-699.
    6. Ferdi Botha, 2012. "The Economics Of Suicide In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 80(4), pages 526-552, December.
    7. Finn, Arden & Leibbrandt, Murray, 2013. "Mobility and Inequality in the First Three Waves of NIDS," SALDRU Working Papers 120, Southern Africa Labour and Development Research Unit, University of Cape Town.
    8. Eduardo Lora, 2013. "The Distance between Perception and Reality in the Social Domains of Life," IDB Publications (Working Papers) 4608, Inter-American Development Bank.
    9. Byela Tibesigwa & Martine Visser & Brennan Hodkinson, 2016. "Effects of Objective and Subjective Income Comparisons on Subjective Wellbeing," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 361-389, August.
    10. repec:spr:soinre:v:135:y:2018:i:1:d:10.1007_s11205-016-1473-4 is not listed on IDEAS
    11. repec:dug:actaec:y:2017:i:3:p:155-168 is not listed on IDEAS
    12. Catherine Kannermeyer, 2016. "Subjective Well-Being Adult South Africans' Life Satisfaction (2008 - 2014)," SALDRU Working Papers 177, Southern Africa Labour and Development Research Unit, University of Cape Town.
    13. repec:dug:actaec:y:2016:i:5:p:33-50 is not listed on IDEAS
    14. repec:spr:jhappi:v:18:y:2017:i:4:d:10.1007_s10902-016-9768-3 is not listed on IDEAS
    15. repec:spr:soinre:v:139:y:2018:i:2:d:10.1007_s11205-017-1739-5 is not listed on IDEAS

    More about this item

    Keywords

    subjective well-being; relative standing; perceptions; expectations; income mobility; South Africa;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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