Economic Comparison and Group Identity: Lessons from India

The caste issue dominates a large part of India's social and political life. Caste shapes one's identity. Furthermore, strong tensions exist between castes. Using subjective well-being data, we assess the role economic comparisons play in this society. We focus on both within and between-castes comparisons. Within-caste comparisons appear to reduce well-being. Comparisons between rival castes are found to decrease well-being three times more. We link these results to two models in which economic comparison triggers the actual caste-based behaviours (castes' political demands, discrimination).