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

  • Geeta Kingdon

    (Centre for the Study of African Economies)

  • John Knight

    (Economics Department , University of Oxford)

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.

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File URL: http://econwpa.repec.org/eps/dev/papers/0409/0409067.pdf
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Paper provided by EconWPA in its series Development and Comp Systems with number 0409067.

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Length: 32 pages
Date of creation: 28 Sep 2004
Date of revision:
Handle: RePEc:wpa:wuwpdc:0409067
Note: Type of Document - pdf; pages: 32
Contact details of provider: Web page: http://econwpa.repec.org

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