Posel, D. and Casale, D. (2011) Relative standing and subjective well-being in South Africa: The role of perceptions, expectations and income mobility.†Social Indicators Research 104(2):195-223. (Electronic publication, DOI: 10.1007/s11205-010-9740-2).†(Also published as ERSA Working Paper, no. 201.)Most studies that explore the impact of relative standing on subjective wellbeing
use objective measures of the individualís relative position, such as the mean income of the reference group or the individualís ranking in the relevant income distribution. In this paper, using a new household survey from South Africa, we are able to derive subjective measures of relative standing, as information is collected on individualsí perceptions of where they rank in the income distribution. We find considerable differences betweenobjective and subjective measures of an individualís relative ranking. Furthermore, our results suggest that an individualís perceived relative status has a significantly larger effect on subjective well-being than objective measures of relative status based on reported income. We also examine the effects on subjective well-being of how individuals perceive their relative position in the income distribution to have changed since childhood, and what they expect their relative position to be in the future. We find that future upward mobility has a smaller effect than upward mobility compared to oneís past, suggesting that life satisfaction is influenced more by what has been achieved than by anticipated achievements.
Professor Dori Posel
Dr Daniela Casale