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Are Comparisons Luxuries? Subjective Poverty and Positional Concerns in Indonesia

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Abstract
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.

Suggested Citation

  • Jinan Zeidan, 2015. "Are Comparisons Luxuries? Subjective Poverty and Positional Concerns in Indonesia," AMSE Working Papers 1505, Aix-Marseille School of Economics, France.
    • Handle: RePEc:aim:wpaimx:1505
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    References listed on IDEAS

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    Cited by:

    1. Chenhong Peng & Paul S. F. Yip & Yik Wa Law, 2020. "What Factors Beyond Economic Poverty Lead People in High-income Societies to Feel Poor? Evidence from Hong Kong," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(3), pages 991-1027, December.

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    More about this item

    Keywords

    Indonesia; subjective well-being; external effects; positional concerns;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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