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Feeling Richer or Poorer than Others: A Cross‐section and Panel Analysis of Subjective Economic Status in Indonesia

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  • Nattavudh Powdthavee

Abstract

This paper examines what makes us feel richer or poorer than others. It investigates cross‐sectional and longitudinal determinants of individuals’ subjective economic status in Indonesia. Using two waves of Indonesian Family Life Surveys, 1997 and 2000, I show that individuals’ perceptions of where they are on the economic scale are more dependent on a number of socioeconomic characteristics, as well as their attitudes towards their future economic status, than their current spending capacities would suggest. I also find significant, albeit weaker, expenditure and income effects on individuals’ subjective economic status once individual fixed effects are controlled for in the regression.

Suggested Citation

  • Nattavudh Powdthavee, 2007. "Feeling Richer or Poorer than Others: A Cross‐section and Panel Analysis of Subjective Economic Status in Indonesia," Asian Economic Journal, East Asian Economic Association, vol. 21(2), pages 169-194, June.
    • Handle: RePEc:bla:asiaec:v:21:y:2007:i:2:p:169-194
    DOI: 10.1111/j.1467-8381.2007.00253.x
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    1. Menno Pradhan & Asep Suryahadi & Sudarno Sumarto & Lant Pritchett, "undated". "Measurements of Poverty in Indonesia: 1996, 1999, and Beyond," Working Papers 422, Publications Department.
    2. Nattavudh Powdthavee, 2005. "Unhappiness and Crime: Evidence from South Africa," Economica, London School of Economics and Political Science, vol. 72(287), pages 531-547, August.
    3. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
    4. Kapteyn, Arie & Van Praag, Bernard M. S. & Van Herwaarden, Floor G., 1978. "Individual welfare functions and social reference spaces," Economics Letters, Elsevier, vol. 1(2), pages 173-177.
    5. Frankenberg, E. & Thomas, D. & Beegle, K., 1999. "The Real Costs of Indonesia's Economic Crisis: Preliminary Findings from the Indonesia Family Life Surveys," Papers 99-04, RAND - Labor and Population Program.
    6. Asep Suryahadi & Sudarno Sumarto, 2003. "Poverty and Vulnerability in Indonesia Before and After the Economic Crisis," Asian Economic Journal, East Asian Economic Association, vol. 17(1), pages 45-64, March.
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    Cited by:

    1. Danzer, Alexander M. & Dietz, Barbara & Gatskova, Ksenia & Schmillen, Achim, 2014. "Showing off to the new neighbors? Income, socioeconomic status and consumption patterns of internal migrants," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 230-245.
    2. Farré, Lídia & Fasani, Francesco, 2013. "Media exposure and internal migration — Evidence from Indonesia," Journal of Development Economics, Elsevier, vol. 102(C), pages 48-61.
    3. Zheng Fang, 2017. "Panel Quantile Regressions and the Subjective Well-Being in Urban China: Evidence from RUMiC Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(1), pages 11-24, May.
    4. Nobles, Jenna & Weintraub, Miranda Ritterman & Adler, Nancy E., 2013. "Subjective socioeconomic status and health: Relationships reconsidered," Social Science & Medicine, Elsevier, vol. 82(C), pages 58-66.
    5. Nattavudh Powdthavee, 2009. "How important is rank to individual perception of economic standing? A within-community analysis," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(3), pages 225-248, September.

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