Subjective well-being, comparisons and reference groups in post-

apartheid South Africa

Marisa CoetzeeUniversity of Stellenbosch

South Africa27 October 2011

Background Theoretical Framework

Data Results

Conclusions

OutlineOutline

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• Subjective well-being / happiness (SWB)• Kingdon and Knight 2007 – the determinants of SWB in

South Africa using 1993 PSLSD (SALDRU) data • Conclusions (briefly):– Relative income more NB than absolute income– Relative income more NB than other relative measures

(e.g. unemployment and education)– Households are altruistic towards other households within

the same residential cluster but compete with households in the same district and racial group

– South Africans’ reference groups divided along racial lines

BackgroundBackground

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• Post apartheid, intra-race inequality has increased, while inter-race inequality decreased slightly.

• Have all attempts by the SA government to integrate society been successful?

• Pierre du Toit and Hennie Kotzè’s Liberal Democracy and Peace in South Africa (2011)

• Racial divide in apartheid legislation further entrenched by affirmative action – “the re-racialization of society”

• However, signs of racial integration from WVS data:• Increased tolerance towards other race groups

• How does this affect South Africans’ reference group?

Theoretical FrameworkTheoretical Framework

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Data

• National Income Dynamics Study (NIDS)• Sample of 7305 households (31170

individuals)• All individuals aged >=16 were asked about

their SWB• First Wave (2008)

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NIDS 2008NIDS 2008

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• However, no study verifying the results of Kingdon and Knight for post-apartheid SA

• Is race still a deciding factor in determining the SWB of South Africans or has democracy changed the reference group?

• Replicate the analysis by Kingdon and Knight (2007) but using NIDS data from 2008

• Issues: • NIDS has 10-point scale versus 5-point scale for PSLSD (SALDRU)

data• NIDS SWB question was asked at individual level, SALDRU at

household level• Have to therefore include individual- and household-level

variables

The question is …The question is …

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1 2 3 4 5 6 7african -0.2772*** -0.2670*** -0.2044*** -0.1977*** -0.2458*** -0.2310*** -0.2377***

coloured 0.0779 0.0828 0.1333 0.1315 0.0898 0.1021 0.1114asian 0.0500 0.0428 0.0646 0.0774 0.0886 0.0850 0.0656hhurate 0.1352 0.1306 0.1503 0.1424 0.1507 0.1411 0.1219asset_index 0.0170*** 0.0172*** 0.0150*** 0.0146*** 0.0168*** 0.0162*** 0.0151***lhhinc_pc 0.1025*** 0.1017*** 0.0950*** 0.0978*** 0.1035*** 0.1000*** 0.1018***Cluster hh umepl rate

0.6048** 0.4419 0.4576

District hh umepl rate

0.7728 0.0440

Cluster hh educ 0.0340** 0.0436*** 0.0370**District hh educ -0.0637* 0.0147District log hh pc income

-0.1845*** -0.1826*** -0.1925*

Cluster log hh pc income

0.0321 0.0093

N 10444 10444 10444 10444 10449 10444 10444

Notes: Reported results are coefficients from ordered probit regressions on subjective well-being categories. A full set of control variables are included, but not reported. *** significance at 1% level, ** significance at 5% level, * significance at 10% level.

Subjective well-being and relative income across spatial reference groups

Subjective well-being and relative income across spatial reference groups

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1 2 3 4african -0.2310*** -0.1640 -0.1547 -0.1662coloured 0.1021 0.1494 0.1544 0.1461asian 0.0850 0.1027 0.1271 0.1084hhurate 0.1411 0.1418 0.1531 0.1434asset_index 0.0162*** 0.0160*** 0.0166*** 0.0161***lhhinc_pc 0.1000*** 0.0990*** 0.1112*** 0.1036**c_lnhhpci 0.0321 0.0267 0.0261d_lnhhpci -0.1826*** -0.2043*** -0.2068*** -0.2016***lrdm_inc 0.0469 0.0497 0.0448rpctile 2 -0.0903 -0.0862rpctile 3 0.0537 0.0609rpctile 4 -0.0327 -0.0238rpctile 5 -0.0458 -0.0254N 10444 10444 10444 10444

Notes: Reported results are coefficients from ordered probit regressions on subjective well-being categories. A full set of control variables are included, but not reported. *** significance at 1% level, ** significance at 5% level, * significance at 10% level.

Race-specific relative incomeRace-specific relative income

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Specification 1 Specification 2african -0.2779*** -0.2644***coloured 0.1879* 0.2016**indian/asian -0.0084 -0.0263asset index 0.0134*** 0.0111**log of pc hh income 0.0751*** 0.0564***Relative household income to others in your village/suburbabove average inc in village/suburb -0.3836*** -0.3622**

average inc in village/suburb -0.6439*** -0.5962***below average inc in village/suburb -1.0957*** -0.9829***

much below average inc in village/suburb

-1.3052*** -1.1155***

Relative household income to others in SAladder rung 2 in SA 0.3885***ladder rung 3 in SA 0.5003***ladder rung 4 in SA 0.6155***ladder rung 5 in SA 0.8839***ladder rung 6 in SA 1.0199**N 9865 9831

Notes: A full set of control variables are included, but not reported. *** significance at 1% level, ** significance at 5% level, * significance at 10% level.

The effect of Perceived Relative Income on subjective well-being

The effect of Perceived Relative Income on subjective well-being

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Below the R515 poverty line Above the R515 poverty line

african -0.2844 -0.2320**coloured 0.2779 0.1906asian -0.0167 -0.1120asset_index 0.0044 0.0195***lhhinc_pc 0.0417 0.0583Relative household income to others in your village/suburbabove average inc in village/suburb -0.3908** -0.2218

average inc in village/suburb -0.6059*** -0.4515**

below average inc in village/suburb -1.0086*** -0.8163***

much below average inc in village/suburb

-1.1815*** -0.8138***

Relative household income to others in SAladder rung 2 in SA 0.3954*** 0.3513***

ladder rung 3 in SA 0.4421*** 0.5936***

ladder rung 4 in SA 0.6082*** 0.7008***

ladder rung 5 in SA 0.6672*** 1.1244***

ladder rung 6 in SA -0.5229 1.9269***N 6197 3631

Notes: A full set of control variables are included, but not reported. *** significance at 1% level, ** significance at 5% level, * significance at 10% level.

Perceived relative income and subjective well-being above and below the poverty line

Perceived relative income and subjective well-being above and below the poverty line

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• Results from Kingdon and Knight’s study remain unchanged in relation to spatial reference groups

• Altruism appears to be one possible explanation for the positive effect of education and employment levels of other households

• However, racial division of reference groups seems to have changed

• Appears to be pointing in the direction of a more racially integrated society

ConclusionsConclusions

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