Empathy and Emulation: Life Satisfaction and the Urban Geography of Comparison Groups

41 Pages Posted: 29 Dec 2008 Last revised: 13 Sep 2014

See all articles by Christopher Barrington-Leigh

Christopher Barrington-Leigh

McGill Institute for Health and Social Policy

John F. Helliwell

University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: December 2008

Abstract

Departures from self-centred, consumption-oriented decision making are increasingly common in economic theory and are well motivated by a wide range of behavioural data from experiments, surveys, and econometric inference. A number of studies have shown large negative externalities in individual subjective well-being due to neighbours' incomes. These reflect the role of nearby households as comparison groups acting in individuals' reference-dependent preferences over income or consumption. At the same time, there are many reasons to expect positive spillovers from having prosperous neighbours. We combine high-resolution geographic data from three Canada-wide social surveys and the 2001 census to disentangle the spatial pattern of reference groups in urban areas and to identify channels of positive and negative spillovers on life satisfaction. We find evidence of significant effects of others' income at different scales and are able to reject a number of alternative explanations for the findings.

Suggested Citation

Barrington-Leigh, Christopher and Helliwell, John F., Empathy and Emulation: Life Satisfaction and the Urban Geography of Comparison Groups (December 2008). NBER Working Paper No. w14593. Available at SSRN: https://ssrn.com/abstract=1320839

Christopher Barrington-Leigh

McGill Institute for Health and Social Policy

Charles Meredith House
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Canada

HOME PAGE: http://barrington-leigh.net/address

John F. Helliwell (Contact Author)

University of British Columbia (UBC) - Department of Economics ( email )

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Canada
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National Bureau of Economic Research (NBER)

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