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Empathy and Emulation: Life Satisfaction and the Urban Geography of Comparison Groups

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  • Christopher P. Barrington-Leigh
  • John F. Helliwell
Abstract
Departures from self-centred, consumption-oriented decision making are increasingly common in economic theory and are well motivated by a wide range of behavioural data from experiments, surveys, and econometric inference. A number of studies have shown large negative externalities in individual subjective well-being due to neighbours' incomes. These reflect the role of nearby households as comparison groups acting in individuals' reference-dependent preferences over income or consumption. At the same time, there are many reasons to expect positive spillovers from having prosperous neighbours. We combine high-resolution geographic data from three Canada-wide social surveys and the 2001 census to disentangle the spatial pattern of reference groups in urban areas and to identify channels of positive and negative spillovers on life satisfaction. We find evidence of significant effects of others' income at different scales and are able to reject a number of alternative explanations for the findings.

Suggested Citation

  • Christopher P. Barrington-Leigh & John F. Helliwell, 2008. "Empathy and Emulation: Life Satisfaction and the Urban Geography of Comparison Groups," NBER Working Papers 14593, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:14593
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    References listed on IDEAS

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    Cited by:

    1. John F. Helliwell & Christopher P. Barrington‐Leigh, 2010. "Viewpoint: Measuring and understanding subjective well‐being," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(3), pages 729-753, August.
    2. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    3. Peter Burton & Shelley Phipps, 2011. "Families, Time, and Well-Being in Canada," Canadian Public Policy, University of Toronto Press, vol. 37(3), pages 395-423, September.
    4. Matthew Brzozowski & Brenda Spotton Visano, 2020. "“Havin’ Money’s Not Everything, Not Havin’ It Is”: The Importance of Financial Satisfaction for Life Satisfaction in Financially Stressed Households," Journal of Happiness Studies, Springer, vol. 21(2), pages 573-591, February.
    5. Abel Brodeur & Sarah Flèche, 2013. "Where the Streets Have a Name: Income Comparisons in the US," CEP Discussion Papers dp1196, Centre for Economic Performance, LSE.
    6. John F. Helliwell & Christopher P. Barrington-Leigh, 2010. "Measuring and Understanding Subjective Well-Being," NBER Working Papers 15887, National Bureau of Economic Research, Inc.
    7. Abel Brodeur & Sarah Flèche, 2019. "Neighbors' Income, Public Goods, and Well‐Being," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(2), pages 217-238, June.
    8. Hajdu, Tamás & Hajdu, Gábor, 2011. "A hasznosság és a relatív jövedelem kapcsolatának vizsgálata magyar adatok segítségével [Examining the relation of utility and relative income using Hungarian data]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 56-73.
    9. Becchetti, Leonardo & Castriota, Stefano & Corrado, Luisa & Ricca, Elena Giachin, 2013. "Beyond the Joneses: Inter-country income comparisons and happiness," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 187-195.
    10. John F. Helliwell & Christopher P. Barrington-Leigh & Anthony Harris & Haifang Huang, 2009. "International Evidence on the Social Context of Well-Being," NBER Working Papers 14720, National Bureau of Economic Research, Inc.
    11. Victoria Reyes-García & Arild Angelsen & Gerald E. Shively & Dmitrij Minkin, 2019. "Does Income Inequality Influence Subjective Wellbeing? Evidence from 21 Developing Countries," Journal of Happiness Studies, Springer, vol. 20(4), pages 1197-1215, April.
    12. Eaton, B. Curtis & Matheson, Jesse A., 2013. "Resource allocation, affluence and deadweight loss when relative consumption matters," Journal of Economic Behavior & Organization, Elsevier, vol. 91(C), pages 159-178.
    13. Stefano Bartolini & Ennio Bilancini & Maurizio Pugno, 2013. "Did the Decline in Social Connections Depress Americans’ Happiness?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(3), pages 1033-1059, February.
    14. Peter Burton & Shelley Phipps, 2010. "The Well-Being of Immigrant Children and Parents in Canada," Working Papers daleconwp2010-09, Dalhousie University, Department of Economics.
    15. John F Helliwell & Hugh Shiplett & Christopher P Barrington-Leigh, 2019. "How happy are your neighbours? Variation in life satisfaction among 1200 Canadian neighbourhoods and communities," PLOS ONE, Public Library of Science, vol. 14(1), pages 1-24, January.
    16. John F. Helliwell & Christopher P. Barrington-Leigh, 2010. "How Much is Social Capital Worth?," NBER Working Papers 16025, National Bureau of Economic Research, Inc.
    17. Ehsan Latif, 2016. "Happiness and Comparison Income: Evidence from Canada," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 161-177, August.
    18. Peter Burton & Shelley Phipps, 2010. "From a Young Teen‟s Perspective: Income and the Happiness of Canadian 12 to 15 Year-Olds," Working Papers daleconwp2010-10, Dalhousie University, Department of Economics.
    19. Feng Hou, 2014. "Keep Up with the Joneses or Keep on as Their Neighbours: Life Satisfaction and Income in Canadian Urban Neighbourhoods," Journal of Happiness Studies, Springer, vol. 15(5), pages 1085-1107, October.
    20. Howley, P.; & Knight, S.;, 2018. "Taking pleasure from neighbours’ misfortune: Comparison effects, social norms and the well-being of the unemployed," Health, Econometrics and Data Group (HEDG) Working Papers 18/02, HEDG, c/o Department of Economics, University of York.
    21. Maryam Dilmaghani, 2018. "Religiosity and Subjective Wellbeing in Canada," Journal of Happiness Studies, Springer, vol. 19(3), pages 629-647, March.

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    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • H0 - Public Economics - - General
    • J0 - Labor and Demographic Economics - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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