Reign in hell or serve in heaven? A cross-country journey into the relative vs absolute perceptions of wellbeing

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Abstract

Questionnaires exploring the relativist vs absolutist perception of wellbeing are administered to 3883 students in eight different countries, four low-income countries (Bolivia, Brazil, Kenya and Laos, 1924 respondents) and four high-income countries (Italy, Sweden, Switzerland and the UK, 1959 respondents). Our data reveal that wellbeing is perceived mainly in relative terms with the strength of relativism being higher for respondents in high-income countries. However, when the satisfaction of some ‘basic needs’ is at stake the absolutist concern becomes powerful. Personal characteristics such as gender and background of studies have a significant role in determining respondents’ perception of wellbeing. Finally, additional insights emerge from our study. Interpersonal comparisons take place by looking both ‘upward’ and ‘downward’ along the income scale, not only income ranking but also the magnitude of reference incomes plays a role and the perception of wellbeing is more elastic to absolute rather than relative income.

Research highlights

► We administer a questionnaire exploring the relativist vs absolutist perception of wellbeing in four low-income countries and four high-income countries. ► Wellbeing is perceived mainly in relative terms in particular in high-income countries. ► When the satisfaction of some ‘basic needs’ is at stake absolutist concerns become powerful. ► Interpersonal comparisons take place by looking both ‘upward’ and ‘downward’ along the income scale. ► Females are more affected by interpersonal concerns than male.

Introduction

In John Milton's masterpiece Paradise Lost (1667), Satan states “To reign is worth ambition though in Hell:/Better to reign in Hell, than serve in Heav’n” (Book I, l. 262–263). As this famous proclamation reads, Satan prefers to live in a microcosm where, despite a less desirable absolute array of benefits, he can enjoy a higher relative position within his cohort. Would people “make a Heav’n of Hell, a Hell of Heav’n” (Book I, l. 255) as Satan did?

We answer this question using primary data from a survey involving 3883 undergraduate students across eight countries – four low-income countries (LICs): Bolivia, Brazil, Kenya and Laos, 1926 respondents, and four high-income countries (HICs): Italy, Sweden, Switzerland and the UK, 1959 respondents. The richness of our questionnaire and the spatial coverage of our sample allows us to shed significant light on the way interpersonal comparisons take place and affect wellbeing. Our work is primarily intended to explore: (i) the importance of relativist concerns in shaping attitudes to wellbeing; (ii) whether there are significant differences in the perception of wellbeing between high- and low-income countries; (iii) the scope left to relativist concerns in the trade-off with the satisfaction of basic needs and (iv) which personal characteristics influence our respondents’ stances. Additional evidence offered by our study relates to the ‘symmetry’ vs ‘asymmetry’ of interpersonal comparisons – i.e. whether people compare with others by ‘looking upward’, ‘looking downward’ or both ways – and to the relevance of the magnitudes of a person's own income and of reference incomes.

We find that wellbeing is strongly affected by the comparison with the achievements of people around us. A neat cross-country pattern emerges, which is consistent through the different questions and versions of our questionnaire and holds also when controlling for a number of personal characteristics and family circumstances: relativism is significantly stronger for high-income countries than for low-income countries. Further, people do trade-off between satisfaction of basic needs and relativist concerns. When the former is at stake relativism loses ground. It is noteworthy, however, that relativist concerns do not at all disappear: 37% of our respondents state that they would be willing to give up the accommodation of the basic needs in order to ‘catch-up with the Joneses’. Interestingly, the introduction of a benchmark such as the satisfaction of the basic needs weakens the observed cross-country heterogeneity. As to personal characteristics, we find a strong gender effect. Interpersonal comparisons are unambiguously more important for females than for males. Also subject specialism seems to matter. Students of social sciences exhibit stronger relativist concerns compared to their colleagues studying different disciplines. Variables at country level such as inequality, religion and public expenditure emerge as potentially powerful predictors of people's attitudes to wellbeing. As we hinted at above, additional insights emerge from our study. Not only is there a negative effect arising from the presence of better-off individuals, but also a positive effect seems to stem from ‘looking downward’ and seeing that there are people with lower achievements. The rank occupied in the income hierarchy is an important factor but also the magnitude of comparison incomes matters; moreover, although our questionnaire is not meant to provide elasticity estimates through the use of multiple-items questions, wellbeing appears more elastic in absolute than in relative income.

The paper develops as follows. By reviewing the literature on the role played by interpersonal comparisons on wellbeing, in Section 2 we show how our research questions derive from current debates in the literature. In Section 3 we describe our approach and our data collection strategy, while in Section 4 we present our findings. In Section 5 we summarise and conclude.

Section snippets

Literature review

The recognition of the impact of interpersonal comparisons and status on individual wellbeing in economic literature dates back to Mill, Pigou and Veblen. In a posthumously published contribution, Mill (1941) states that “Men do not desire merely to be rich, but to be richer than other men…The avaricious or covetous man would feel little or no satisfaction in the possession of any amount of wealth if he were the poorest amongst all his neighbours or fellow-countrymen.” (p. 49, emphases in

The questionnaire

The survey was carried out during January–May 2007. In supervised classroom sessions anonymous questionnaires were administered to 3883 undergraduate students from different disciplines in eight countries – four LICs (Bolivia, Brazil, Kenya and Laos, 1924 respondents) and four HICs (Italy, Sweden, Switzerland and the UK, 1959 respondents).5

Results

In each classroom the questionnaires were dispensed in a chessboard-like distribution of the two versions, the result being that each version was allocated to a randomly selected half of students – 1944 respondents for UBN and 1939 respondents for SBN. The descriptive statistics of all the variables used in the following analysis are presented in Table 1. In order to compare the subject pools taking part in the two versions of the questionnaire, for each socio-demographic characteristic used in

Concluding remarks

By means of an approach different from the customary use of data on self-reported happiness, this paper investigates the absolutist vs relativist attitude to wellbeing. Following the terminology of Leibenstein (1962), we provide evidence that interpersonal comparisons tend to be “pure Pareto” only when the fulfilment of some basic needs is at stake. Wellbeing is strongly affected by the comparison with achievements of people around us. Not is only there a negative effect arising from the

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    This paper is based on a survey carried out in fifteen academic institutions across eight countries: Universidad Mayor de San Simón and Universidad Católica Boliviana (Bolivia); Universidade Federal do Rio de Janeiro and Fundaçao Getulio Vargas do Rio de Janeiro (Brazil); Bocconi University, Università dell’Insubria, LIUC, Università di Milano and Università di Novara (Italy); University of Nairobi (Kenya); National Lao University (Laos), Goteborg University (Sweden); Université de Genève and Università di Lugano (Switzerland); and University of East Anglia (UK). This survey is part of a wider research project on students’ perception on poverty and wellbeing which involved nearly 6000 students in nine countries. The project pursued the investigation of students’ views on interpersonal comparisons and on poverty measurement axioms by means of four different questionnaires. Each student was presented with only one questionnaire and each of the three papers is based on different data. We refer the reader to: Esposito and Majorano (forthcoming) for results on the support for customary axioms in poverty measurement; and to Corazzini et al. (forthcoming) for the investigation of the ‘hierarchy of capabilities’ between absolute and relative poverty as conceptualised by Atkinson and Bourguignon (2001) and Kakwani and Silber (2008) in the context of multidimensional poverty analysis. We thank the deans, the lecturers, the administrative staff and the students in all the above institutions for helping us in carrying out our research project. This paper has benefited from useful comments provided by Bereket Kebede, Peter Lambert, Mario Piacentini, José Pedro Simões Neto, Arjan Verschoor and two anonymous referees. The usual caveat applies.

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