Template-Type: ReDIF-Paper 1.0
Title: The Role of Proximity in Social Income Dynamic Comparisons and Well-Being
Author-Name: Raquel Fonseca
Author-Name: Ana I. Moro-Egido 
Creation-date: 2025
Abstract: The present study investigates the role of proximity in shaping social income static and dynamic comparisons and their impact on well-being, measured in terms of self-assessed health. 
Using the Spanish Survey of Household Finances (2002-2017), the study examines how individuals compare their income trajectories with those of their peers, considering varying degrees of proximity. 
The findings reveal that well-being is negatively impacted by static comparisons only in the case of a significant income gap with richer individuals. However, when dynamic comparisons are
introduced, individuals experience an improvement in their subjective well-being when comparing to individuals who previously earned more but now earn less, as long as they drop at a certain 
distance. Consequently, no effect is observed when comparing with individuals in closer proximity, and effects emerge when the degree of proximity is low.
Classification-JEL: C29, D31, I31.
Keywords: static and dynamic relative hypotheses, income, proximity, well-being.
File-URL: https://creei.ca/wp-content/uploads/2025/04/cahier_25_02_role_proximity_social_income_dynamic.pdf
File-Size: 533
Handle: RePEc:rsi:creeic:2502