Social Interactions and Subjective Well-Being: Evidence from Latin America

In this paper, we seek to examine the effect of comparisons and social capital on subjective well-being. We test if, through social influence and exposure, social capital is either an enhancer or appeaser of the comparison effect. Using the Latinobarómetro Survey (2007) we find that, the comparison effect appears, that is the better others perform, the happier the individual is. We also find that social capital is among the strongest correlates of individuals’ subjective well-being. Our findings suggest that social contacts may enhance the comparison effect, which is more intense for those who perform worse in their reference group. Econometric Modelling We find that, the comparison effect appears, that is the better others perform, the happier the individual is. We also find that social capital is among the strongest correlates of individuals’ subjective well-being. Our findings suggest that social contacts may enhance the comparison effect, which is more intense for those who perform worse in their reference group.