Life Satisfaction and Income in Canadian Urban Neighbourhoods - ARCHIVED

An emerging area of subjective well-being (SWB) research is centered on the differences in the levels of SWB both across countries and among geographic regions within a country. The consideration of geographic differences would extend our knowledge about the determinants of SWB from "internal" factors of personality traits and individuals' socio-demographic characteristics to "external factors" embedded in individuals' environments. An issue with important theoretical and policy implications is whether the income of others in the same geographic area is associated with individuals' SWB. The association could be positive if people benefit from the improved resources, amenities, and social capital in high-income areas. The association could also be negative if people tend to emulate the lifestyles of their more affluent neighbours. Related empirical studies so far have not come to a consensus on this question.

The present study attempts to contribute to this issue in two significant ways. First, this study examines whether the effect of the average income in a geographic area (locality income) on SWB is sensitive to the scale of geographic units. With a very large sample of survey respondents nested within three hierarchical levels of geographic areas, this study provides reliable estimates of the association of SWB with average incomes in immediate neighbourhoods (defined as "census dissemination areas"), local communities ("census tracts"), and municipalities ("census subdivisions"). Second, this study examines how the choice of control variables influences the estimated effect of locality income. By considering the effects of individual demographic and socioeconomic characteristics, self-evaluated general health, and area-level attributes in a sequential manner, it is possible to discuss the likely mechanisms through which locality income is related to individuals' SWB.