Lower in Rank, But Happier: The Complex Relationship between Status and Happiness
LICOS Discussion Paper Series, Discussion Paper 385/2016
28 Pages Posted: 30 Nov 2016
Date Written: September 29, 2016
Case studies across the social sciences have established a positive relationship between social status and happiness. In observational data, however, identification challenges remain severe. This study exploits the fact that in India people are assigned a caste from birth. In data on 1000 individuals living in the Punjab, a state with a large income gap between middle and high castes in spite of similar education levels, we find that those in the middle are the least happy. Our findings resemble those described by the famous paradox of unhappy Olympic silver medal winners, which finds a V-shaped relation between status and happiness. The same trend is much less pronounced in data on 1000 individuals living in the state of Andhra Pradesh with much smaller economic differences between castes. We hypothesize that these patterns reflect the relatively high weight of upward comparisons for middle caste groups in Punjab, based on their stronger similarity in ability attributes with castes higher up in the hierarchy.
Keywords: subjective well-being, happiness, social status, social comparison
JEL Classification: I31, C1, O12
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