Frustrated Achievers: Winners, Losers and Subjective Well-Being in New Market Economies

• Published in: The Journal of development studies Vol. 38; no. 4; pp. 100 - 140
• Main Authors: Graham, C., Pettinato, S.
• Format: Journal Article
• Language: English
• Published: Taylor & Francis Group 01.04.2002; Taylor and Francis Journals
• Series: The Journal of Development Studies
• Subjects: Affluence; Development studies; Economic Development; Economic Elites; Economic Policy; Emerging markets; Happiness; Income; Income Inequality; Low Income Groups; Macroeconomics; Market economies; Market Economy; Peru; Quality of Life; relative income differences; Russia; Social comparison; subjective well-being; Subjective wellbeing; sustainability of market policies; Volatility; Well-being
• ISSN: 0022-0388; 1743-9140
• DOI: 10.1080/00220380412331322431

To date the literature on subjective well-being has focused on the developed economies. We provide empirical evidence from two emerging market countries, Peru and Russia. Our results - and in particular a strong negative skew in the assessments of the respondents with the greatest income gains - support the importance of relative rather than absolute income differences. Among other factors, we attribute our results to shifts in reference norms and to macroeconomic volatility. Relative differences seem to matter more for those in the middle of the distribution than for the very wealthy or the very poor. Our respondents were more critical in assessing their progress vis-à-vis others in their country versus those in their community. The large and consistent gap we find between objective income trends and the subjective assessments of the upwardly mobile may have implications for the future economic and political behaviour of a group that is critical to the sustainability of market policies.