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Feeling Richer or Poorer than Others: A Cross-section and Panel Analysis of Subjective Economic Status in Indonesia

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This paper examines what makes us feel richer or poorer than others. It investigates cross-sectional and longitudinal determinants of individuals’ subjective economic status in Indonesia. Using two waves of Indonesian Family Life Surveys, 1997 and 2000, I show that individuals’ perceptions of where they are on the economic scale are more dependent on a number of socioeconomic characteristics, as well as their attitudes towards their future economic status, than their current spending capacities would suggest. I also find significant, albeit weaker, expenditure and income effects on individuals’ subjective economic status once individual fixed effects are controlled for in the regression.
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Keywords: I3; Indonesia; Indonesia Family Life Survey; O53; expenditure; income; poverty; subjective economic status

Document Type: Research Article

Affiliations: Institute of Education, University of London, 55–59 Gordon Square, London, WC1H 0AL, UK

Publication date: June 1, 2007

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