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

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  • Feng Hou

Abstract

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. Copyright Springer Science+Business Media Dordrecht 2014

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  • 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.
    • Handle: RePEc:spr:jhappi:v:15:y:2014:i:5:p:1085-1107
    DOI: 10.1007/s10902-013-9465-4
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    Cited by:

    1. Zoua M. Vang & Feng Hou & Katharine Elder, 2019. "Perceived Religious Discrimination, Religiosity, and Life Satisfaction," Journal of Happiness Studies, Springer, vol. 20(6), pages 1913-1932, August.
    2. David Bartram, 2022. "The ‘Gender Life-Satisfaction/Depression Paradox’ Is an Artefact of Inappropriate Control Variables," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(3), pages 1061-1072, December.
    3. David G. Blanchflower & Carol L. Graham, 2022. "The Mid-Life Dip in Well-Being: a Critique," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 161(1), pages 287-344, May.
    4. Khatai Aliyev & Orkhan Nadirov & Bruce Dehning, 2022. "Income and Life Satisfaction: A ‘Wave Formation’ Framework," Journal of Happiness Studies, Springer, vol. 23(3), pages 847-860, March.
    5. Thanasis Ziogas & Dimitris Ballas & Sierdjan Koster & Arjen Edzes, 2020. "How happy are my neighbours? Modelling spatial spillover effects of well-being," Papers 2007.11580, arXiv.org.
    6. David Bartram, 2021. "Cross-Sectional Model-Building for Research on Subjective Well-Being: Gaining Clarity on Control Variables," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(2), pages 725-743, June.
    7. Benjamin Schalembier, 2016. "The Impact of Exposure to Other Countries on Life Satisfaction: An International Application of the Relative Income Hypothesis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 221-239, August.
    8. 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.

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