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. 2015 Apr;2015:140.
doi: 10.15185/izawol.140.

Relative Deprivation and Individual Well-Being: Low Status and a Feeling of Relative Deprivation Are Detrimental to Health and Happiness

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Free PMC article

Relative Deprivation and Individual Well-Being: Low Status and a Feeling of Relative Deprivation Are Detrimental to Health and Happiness

Xi Chen. IZA World Labor. .
Free PMC article

Abstract

People who are unable to maintain the same standard of living as others around them experience a sense of relative deprivation that has been shown to reduce feelings of well-being. Relative deprivation reflects conditions of worsening relative poverty despite striking reductions in absolute poverty. The effects of relative deprivation explain why average happiness has been stagnant over time despite sharp rises in income. Consumption taxes on status-seeking spending, along with official and traditional sanctions on excess consumption and redistributive policies may lessen the negative impact of relative deprivation on well-being.

Keywords: happiness; health; relative deprivation; relative poverty; relative status; well-being.

Conflict of interest statement

Competing interests The IZA World of Labor project is committed to the IZA Guiding Principles of Research Integrity. The author declares to have observed these principles.

Figures

Figure 1
Figure 1. The Easterlin paradox
Note: In all three periods (t0, t1, t2,), higher individual income is associated with higher individual happiness (the dotted lines), but aggregate happiness does not rise along with aggregate income from t0 to t2, (the solid line). Source: Clark, A. E., P. Frijters, and M. Shields. “Relative income, happiness and utility: An explanation for the Easterlin paradox and other puzzles.” Journal of Economic Literature 46:1 (2008): 95–144 [4].
Figure 2
Figure 2. As the number of absolutely poor people in the world has declined, the number of relatively poor people has risen, 1981–2008
Note: Absolutely poor is defined as an income of less than $1.25 a day; relatively poor refers to people with incomes below a socially acceptable level, which is often higher than the absolute poverty line. Data cover 100 countries. Source: Ravallion, M., and S. Chen. “Weakly relative poverty.” Review of Economics and Statistics 93:4 (2011): 1251–1261 [13].

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