Relative deprivation in Tanzania: Relative concerns and empathy

This paper examines the importance of relative deprivation in Tanzania, a poor African country, using three waves Tanzanian National Panel Survey. We contribute to earlier literature Africa by controlling for time persistent unobservable individual characteristics (panel data) and, most important, two measures satisfaction (life and financial satisfaction), definitions reference group, testing different hypothesis. By comparing results between across groups we can understand mechanisms through which comparisons work setting. In contrast with literature, find strong evidence all individuals life only weaker ties their community. For those (45% our total sample; 52% rural sample), positive correlation leave-out mean consumption close neighbors argue that this be explained feelings empathy. favor taking others into account when assessing introducing welfare policies, also less developed countries.