Keep Up with the Joneses or Keep on as Their Neighbours: Life Satisfaction and Income in Canadian Urban Neighbourhoods
- 542 Downloads
This study examines possible positive spillovers and negative consumption externalities of the average income in a geographic area (locality income) on individuals’ life satisfaction, focusing on two issues. The first is whether the effect of locality income on life satisfaction is sensitive to the scale of geographic units. The second is how the choice of control variables affects the estimated effect of locality income. The analysis of 142,780 survey respondents nested within 31,000 neighbourhoods, 5,000 local communities and 430 municipalities suggests that the positive spillovers of locality income are stronger in immediate neighbourhoods and local communities than at the municipality level. The positive association between locality income and life satisfaction to a large extent is attributable to the selective geographic concentration of individuals by income, marital status, and homeownership. Although the results do not rule out the existence of negative consumption externalities, its effect, if any, does not offset the positive spillovers.
KeywordsLife satisfaction Relative income Neighbourhood Community
Many thanks to the journal editor and reviewers for their constructive suggests. The author is grateful to Aneta Bonikowska, Kristyn Frank, Haifang Huang, Grant Schellenberg, and Christopher Schimmele for advice and comments on various issues related to estimation strategies and interpretation of the results.
- Angrist, J., & Pischke, J. (2009). Mostly harmless econometrics. Princeton, NJ: Princeton University Press.Google Scholar
- Barrington-Leigh, C., & Helliwell, J. (2008). Empathy and emulation: Life satisfaction and the urban geography of comparison groups. NBER Working Paper, No. 14593.Google Scholar
- Bonikowska, A., Helliwell, J., Hou, F., & Schellenberg, G. (2013). An assessment of life satisfaction responses on recent Statistics Canada surveys. Analytical studies branch research paper series. Ottawa: Statistics Canada.Google Scholar
- Diener, E., & Chan, M. (2011). Happy people live longer: Subjective well-being contributes to health and longevity. Applied Psychology: Health and Well-being, 3(1), 1–43.Google Scholar
- Fowler, J., & Christakis, N. (2008). Dynamic spread of happiness in a large social network: Longitudinal analysis over 20 years in the Framingham Heart study. British Medical Journal, 337, a2338, 1–9.Google Scholar
- Helliwell, J., & Huang, H. (2010). How’s the job? Well-being and social capital in the workplace. Industrial and Labor Relations Review, 63(2), 205–227.Google Scholar
- Luttmer, E. (2005). Neighbors as negatives: Relative earnings and well-being. The Quarterly Journal of Economics, 120, 963–1002.Google Scholar
- Raudenbush, S. W., Bryk, A. S., Cheong, Y. F., & Congdon, R. T. (2000). HLM5 hierarchical linear and nonlinear modeling. Lincolnwood, IL: Scientific Software International, Inc.Google Scholar
- Wilson, W. J. (1987). The truly disadvantaged: The inner city, the underclass, and public policy. Chicago: University of Chicago Press.Google Scholar