Neighbors' income, public goods, and well‐being

Brodeur, Abel and Flèche, Sarah (2018) Neighbors' income, public goods, and well‐being. Review of Income and Wealth. ISSN 0034-6586

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Abstract

How does neighbors' income affect individual well‐being? Our analysis is based on rich U.S. local data from the Behavioral Risk Factor Surveillance System, which contains information on where respondents live and their self‐reported well‐being. We find that the effect of neighbors' income on individuals' self‐reported well‐being varies with the size of the neighborhood included. In smaller areas such as ZIP codes, we find a positive relationship between median income and individuals' life satisfaction, whereas it is the opposite at the county, MSA, and state levels. We provide evidence that local public goods and local area characteristics such as unemployment, criminality, and poverty rates drive the association between satisfaction and neighbors' income at the ZIP code level. The neighbors' income effects are mainly concentrated among poorer individuals and are as large as one quarter of the effect of own income on self‐reported well‐being.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/14754991
Additional Information:	© 2018 International Association for Research in Income and Wealth
Divisions:	Centre for Economic Performance
Subjects:	H Social Sciences > HB Economic Theory
JEL classification:	C - Mathematical and Quantitative Methods > C2 - Econometric Methods: Single Equation Models; Single Variables > C25 - Discrete Regression and Qualitative Choice Models J - Labor and Demographic Economics > J0 - General > J01 - Labor Economics: General R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R23 - Regional Migration; Regional Labor Markets; Population
Date Deposited:	14 May 2018 10:23
Last Modified:	29 Feb 2024 20:00
Funders:	FQRSC
URI:	http://eprints.lse.ac.uk/id/eprint/87911

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