Do social comparisons and negative shocks affect the subjective well-being of the poor? Evidence from the Peruvian Amazon

摘要

This paper contributes to the literature by testing the effect of a household's relative position on its subjective well-being. Our results show that both self-perceived status and relative income have significant effects on the subjective well-being of households located in the Peruvian Amazon. The paper also considers negative random shocks and shows that non-agricultural shocks have a negative effect on subjective well-being. These results imply that public policies aimed toward the improvement of rural households' well-being in the Peruvian Amazon should look beyond poverty reduction and consider also the positive effects that inequality reduction can have on subjective well-being.