Elsevier

World Development

Volume 64, December 2014, Pages 407-419
World Development

Caste Comparisons in India: Evidence From Subjective Well-Being Data

https://doi.org/10.1016/j.worlddev.2014.06.025Get rights and content

Summary

This paper evaluates how caste influences economic comparisons in India. Using happiness data from an original panel survey, we find that both within-caste comparisons and between-caste comparisons reduce well-being. Between-caste comparisons reduce well-being three times more than within-caste comparisons. In absolute terms, an increase in rival caste expenditures affects well-being as much as primary expenditure. These findings highlight the strong influence that comparisons between rival castes have on well-being. Yet this comparison scheme turns out to be asymmetrical: only low-caste individuals are affected by the economic successes of their rivals, whereas only higher-caste individuals compete with their fellows.

Introduction

India is well known for the clustering of its population into castes. Although the nature of caste and its influence on society have changed substantially throughout the previous century, it remains a central cause of inequality in India. Importantly, caste continues to generate significant social and political tensions among the population. Because of that, it is plausible that it affects the sense of well-being in India, even after we control for the effects on happiness from variables largely influenced by caste, such as expenditure levels and educational attainments. However, the lack of data on subjective well-being means that research on the caste system’s happiness impact is scarce.

In this paper, we use subjective well-being data from an original dataset to study the impact of caste on well-being. We examine the direct effect of caste on happiness. Importantly, we also provide evidence about the impact on well-being of caste-based comparisons, that is, on the fact the economic successes of those in rival castes could be an important source of frustration. In the Indian context, such comparisons are likely to be strong and could cause significant well-being losses. By studying caste-based comparisons, this paper contributes to both the research on the well-being impact of caste and a line of research on the existence of between-group comparisons. While many studies have established that individual well-being can be affected by the consumption and income of others, a relatively newer, and still open, question is whether people with specific characteristics tend to compare themselves to certain types of rivals. India provides an opportunity to contribute to this line of research, as the country is one of very few characterized by well-defined social groups and strong between-group tensions.

We use subjective well-being data to assess the strength of within- and between-caste comparisons in India. Specifically, we make joint use of two datasets. The first dataset is an original urban panel survey for India conducted by researchers at the Osaka University, Japan. A nice feature of the survey is that it contains a happiness question, which is rare among surveys conducted in developing countries. The second dataset is a large, representative Indian population survey. This second survey enables us to estimate the expenditure of the groups to which respondents are likely to compare themselves.

Our main results are as follows. We find that the direct influence of caste on well-being is limited. Caste influences variables such as expenditure and education, which, in turn, affect happiness. However, once we control for those variables, the effect from caste membership itself is weak. This finding is similar to that of Linssen, van Kempen, and Kraaykamp (2011) for rural India, which is, to our knowledge, the only published work on happiness in India. However, that study focused on only the “raw” effect of caste membership on happiness. In the present paper, we also consider the possibility that caste affects well-being through within- and between-caste comparisons. We consequently focus on caste comparisons and show that the caste system does, in fact, affect happiness substantially in India. Specifically, we find the following. First, within-caste comparisons reduce well-being. This result suggests that expenditure by others from the same caste triggers envy more strongly than it acts as a positive signal about one’s future prospects. As argued in Section 2(b), this finding differs from what might have been expected in such a rapidly growing and changing country. A consequence of this result is that the absolute benefits from economic growth may be diminished by relative concerns. Second, Indians view rival castes’ economic situation with envy. Between-caste comparisons are unexpectedly strong and, in absolute terms, comparisons to rival castes affect well-being as much as expenditure does. We find that between-caste comparisons have triple the effect on happiness that within-caste comparisons do. These results show how fraught comparisons are in Indian society, and how much they affect well-being. Third, this comparison pattern appears to be asymmetrical: higher castes’ economic successes are detrimental to low castes’ well-being, but the reverse is not true. Additionally, within-caste comparisons are mostly made among members of higher castes. All of these results hold both when pooling the cross-sections and when adding individual fixed effects into the regression.

The rest of the paper is organized as follows. The second section provides some background on the Indian caste system and between-caste tensions. This section also reviews the literature on comparisons in India and the evidence of between-group comparisons in other countries. The third section describes our datasets. The fourth section presents our methodology and predictions. The fifth section provides empirical results, and the last section concludes the paper.

Section snippets

A conflictual caste society

This section provides some background that is helpful in understanding the tensions that may exist between castes. The caste system clusters Indian society into thousands of small endogamous communities called jatis. The traditional Hindu view additionally considers that individuals can be further agglomerated in “four plus one” groups, although the correspondence between jatis and these groups has historically been debated and subject to change (Gupta, 2000). The four first groups are the

SPSL

Our analysis makes joint use of two databases. The first is the Survey on Preferences toward, and Satisfaction with, Life (hereafter SPSL).5 The SPSL is a publicly available longitudinal survey conducted by Osaka University, with data collected in China, India, Japan, and the United States. This survey aims mainly at providing

Methodology

Throughout this article, we will consider the following happiness function:Uit=βylog(yit)+βclog(ycasteit)+βrlog(yrivalit)+βXit+εit,where Uit stands for happiness. Xit stands for a set of conventional socio-demographic characteristics that has been described in the databases section. yit stands for i’s own expenditure. Respondents may compare to two reference groups: one in their caste, and one in their rival castes. ycasteit represents the median expenditure in the first group, and yrivalit the

Empirical results

In the following, we estimate the happiness Eq. (1). We first display the results obtained when no reference expenditure term is included in the regression. In a second stage, we assess the importance of comparisons in India. The analysis mainly makes use of pooled cross-sections ordinary least squares (OLS).

Concluding comments

The caste system is commonly thought to generate sharp inequalities in well-being. In fact, caste deeply influences well-being through its effect on socioeconomic variables, such as expenditure and education. Previous research carried out in rural areas has indicated no significant impact of caste ceteris paribus. Using a unique Indian panel dataset, we find that this result also holds in urban India, even though the OBCs’ do seem to suffer from their status.

Our study, however, reveals that

Acknowledgments

A previous version of this paper was circulated under the title “Economic Comparison and Group Identity: Lessons from India.” We are grateful to Shinsuke Ikeda, Fumio Ohtake, and Yoshiro Tsutsui of the Osaka University for allowing us to use original data from “Survey on Preferences toward, and Satisfaction with, Life.” We are also grateful to the CEPREMAP and the India Research Group for providing us the Indian National Sample Survey data. We are very grateful to Ashwini Desphpande for her

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