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Diskussionspapiere - Hannover Economic Papers (HEP)

The impact of local shocks on well-being: Only a matter of perception?

Autor: Wiebke Stein and Reinhard A. Weisser
Nummer: 634, Jul 2018, pp. 35
JEL-Class: I31, Q51, R23

Abstract:
This paper investigates how witnessing adverse events affects individuals' perceptions and consequently their personal subjective well-being. In order to do so, we compare material well-being dynamics with changes in subjective well-being. We link GIS data on local flood shocks to an extensive household sample from rural Southeast Asia. This allows us to contrast individuals who actually experienced a shock with those who did not. We find that the mere proximity to a potentially adverse flood shock, without any direct impact on a household's material well-being, can be sufficient to affect subjective well-being.

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