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Title Relative Standing and Life-Satisfaction: Does Unobserved Heterogeneity Matter?
Full text http://hdl.handle.net/2077/34642
Date 2013
Author(s) Alem, Yonas
Abstract Unlike most studies of subjective well-being in developing countries, we use a fixed effects regression on three rounds of rich panel data to investigate the impact of relative standing on life satisfaction of respondents in urban Ethiopia. We find a consistently large negative impact of relative standing - both relative to others and to oneself over time - on subjective well-being. However, controlling for unobserved heterogeneity through a fixed effects model reduces the impact of the relative standing variables on subjective well-being by up to 24 percent and reduces the impact of economic status by about 40 percent. Our findings highlight the need to be cautious in interpreting parameter estimates from subjective well-being regressions based on cross-sectional data, as the impact of variables may not be disentangled from that of unobserved heterogeneity. - JEL Classification: O12, I30, I31
Subject(s) Life Satisfaction; Urban Ethiopia; Relative Standing; Fixed Effects
Language eng
Relation Working Papers in Economics; 579
Type of publication report
Format 20
Identifier 1403-2465
Repository Gothenberg - University of Gothenberg
Added to C-A: 2014-01-15;12:13:58