Neighbors' income, public goods, and well‐being

How does neighbors' income affect individual well‐being? Our analysis is based on rich U.S. local data from the Behavioral Risk Factor Surveillance System, which contains information on where respondents live and their self‐reported well‐being. We find that the effect of neighbors' income on individuals' self‐reported well‐being varies with the size of the neighborhood included. In smaller areas such as ZIP codes, we find a positive relationship between median income and individuals' life satisfaction, whereas it is the opposite at the county, MSA, and state levels. We provide evidence that local public goods and local area characteristics such as unemployment, criminality, and poverty rates drive the association between satisfaction and neighbors' income at the ZIP code level. The neighbors' income effects are mainly concentrated among poorer individuals and are as large as one quarter of the effect of own income on self‐reported well‐being

Economic Backwardness and Social Tension

We propose that relative economic backwardness contributes to the build-up of social tension and non-violent and violent conflict. We test our hypothesis using data on organized mass movements and armed civil conflict. The findings show that greater economic backwardness is consistently linked to a higher probability of onset of violent and especially non-violent forms of civil unrest. We provide evidence that the relationship is causal in instrumental variables estimations using new instruments, including mailing speeds and telegram charges around 1900. The magnitude of the effect of backwardness on social tension increases in the two-stage least-squares estimations

The Origin of Behavior

We propose a single evolutionary explanation for the origin of several behaviors that have been observed in organisms ranging from ants to human subjects, including risk-sensitive foraging, risk aversion, loss aversion, probability matching, randomization, and diversification. Given an initial population of individuals, each assigned a purely arbitrary behavior with respect to a binary choice problem, and assuming that offspring behave identically to their parents, only those behaviors linked to reproductive success will survive, and less reproductively successful behaviors will disappear at exponential rates. When the uncertainty in reproductive success is systematic, natural selection yields behaviors that may be individually sub-optimal but are optimal from the population perspective; when reproductive uncertainty is idiosyncratic, the individual and population perspectives coincide. This framework generates a surprisingly rich set of behaviors, and the simplicity and generality of our model suggest that these derived behaviors are primitive and nearly universal within and across species

The effects of economic deprivation on psychological well-being among the working population of Switzerland

BACKGROUND: The association between poverty and mental health has been widely investigated. There is, however, limited evidence of mental health implications of working poverty, despite its representing a rapidly expanding segment of impoverished populations in many developed nations. In this study, we examined whether working poverty in Switzerland, a country with substantial recent growth among the working poor, was correlated with two dependent variables of interest: psychological health and unmet mental health need. METHODS: This cross-sectional study used data drawn from the first 3 waves (1999–2001) of the Swiss Household Panel, a nationally representative sample of the permanent resident population of Switzerland. The study sample comprised 5453 subjects aged 20–59 years. We used Generalized Estimating Equation models to investigate the association between working poverty and psychological well-being; we applied logistic regression models to analyze the link between working poverty and unmet mental health need. Working poverty was represented by dummy variables indicating financial deficiency, restricted standard of living, or both conditions. RESULTS: After controlling other factors, restricted standard of living was significantly (p < .001) negatively correlated with psychological well-being; it was also associated with approximately 50% increased risk of unmet mental health need (OR = 1.55; 95% CI 1.17 – 2.06). CONCLUSION: The findings of this study contribute to our understanding of the potential psychological impact of material deprivation on working Swiss citizens. Such knowledge may aid in the design of community intervention programs to help reduce the individual and societal burdens of poverty in Switzerland

Interdependent Utilities: How Social Ranking Affects Choice Behavior

Organization in hierarchical dominance structures is prevalent in animal societies, so a strong preference for higher positions in social ranking is likely to be an important motivation of human social and economic behavior. This preference is also likely to influence the way in which we evaluate our outcome and the outcome of others, and finally the way we choose. In our experiment participants choose among lotteries with different levels of risk, and can observe the choice that others have made. Results show that the relative weight of gains and losses is the opposite in the private and social domain. For private outcomes, experience and anticipation of losses loom larger than gains, whereas in the social domain, gains loom larger than losses, as indexed by subjective emotional evaluations and physiological responses. We propose a theoretical model (interdependent utilities), predicting the implication of this effect for choice behavior. The relatively larger weight assigned to social gains strongly affects choices, inducing complementary behavior: faced with a weaker competitor, participants adopt a more risky and dominant behavior