Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215115 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12719
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper examines the importance of relative deprivation in Tanzania, a poor African country, using three waves of the Tanzanian National Panel Survey. We contribute to earlier literature in Africa by controlling for time persistent unobservable individual characteristics (panel data) and by using two measures of satisfaction (life and financial satisfaction) and two definitions of reference group. By comparing results between satisfaction measures and across definitions of reference groups we help to understand the mechanisms through which comparisons work in a poor setting. In contrast with earlier literature, we find strong evidence of relative deprivation in financial satisfaction of all individuals in Tanzania, and evidence for life satisfaction only for individuals with weaker ties with their community. For those with strong ties, we find evidence of a positive correlation between life satisfaction and the average consumption of close neighbors and argue that this can be explained by feelings of empathy.
Subjects: 
Africa
financial satisfaction
life satisfaction
relative deprivation
Tanzania
JEL: 
D63
D64
I32
O12
Document Type: 
Working Paper

Files in This Item:
File
Size
761.86 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.