Journal of Happiness Studies

, Volume 15, Issue 5, pp 1085–1107 | Cite as

Keep Up with the Joneses or Keep on as Their Neighbours: Life Satisfaction and Income in Canadian Urban Neighbourhoods

  • Feng HouEmail author
Research Paper


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.


Life 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.


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Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  1. 1.Social Analysis DivisionStatistics CanadaOttawaCanada

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