Subjective well-being, comparisons and reference groups in post- apartheid South Africa Marisa Coetzee University of Stellenbosch South Africa 27 October 2011

 Background  Theoretical Framework  Data  Results  Conclusions Outline 2

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 Background 3

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 Framework 4

Data National Income Dynamics Study (NIDS) Sample of 7305 households (31170 individuals) All individuals aged >=16 were asked about their SWB First Wave (2008) 5

NIDS

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 … 7

african *** *** *** *** *** *** *** coloured asian hhurate asset_index0.0170***0.0172***0.0150***0.0146***0.0168***0.0162***0.0151*** lhhinc_pc0.1025***0.1017***0.0950***0.0978***0.1035***0.1000***0.1018*** Cluster hh umepl rate ** District hh umepl rate Cluster hh educ0.0340**0.0436***0.0370** District hh educ * District log hh pc income *** *** * Cluster log hh pc income N 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 8

1234 african *** coloured asian hhurate asset_index0.0162***0.0160***0.0166***0.0161*** lhhinc_pc0.1000***0.0990***0.1112***0.1036** c_lnhhpci d_lnhhpci *** *** *** *** lrdm_inc rpctile rpctile rpctile rpctile N10444 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 income 9

Specification 1Specification 2 african *** *** coloured0.1879*0.2016** indian/asian asset index0.0134***0.0111** log of pc hh income0.0751***0.0564*** Relative household income to others in your village/suburb above average inc in village/suburb *** ** average inc in village/suburb *** *** below average inc in village/suburb *** *** much below average inc in village/suburb *** *** Relative household income to others in SA ladder rung 2 in SA0.3885*** ladder rung 3 in SA0.5003*** ladder rung 4 in SA0.6155*** ladder rung 5 in SA0.8839*** ladder rung 6 in SA1.0199** N 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 10

Below the R515 poverty lineAbove the R515 poverty line african ** coloured asian asset_index *** lhhinc_pc Relative household income to others in your village/suburb above average inc in village/suburb ** average inc in village/suburb *** ** below average inc in village/suburb *** *** much below average inc in village/suburb *** *** Relative household income to others in SA ladder rung 2 in SA ***0.3513*** ladder rung 3 in SA ***0.5936*** ladder rung 4 in SA ***0.7008*** ladder rung 5 in SA ***1.1244*** ladder rung 6 in SA *** N 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 11

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 Conclusions 12