Caste Comparisons: Evidence from India

The caste issue dominates a large part of India’s social and political life. Caste shapes Indians’ identities, and strong tensions exist between castes. This paper evaluates how caste-based comparisons may be exacerbated in such a conflictual context. Using subjective well-being data from an original panel survey, together with a national representative survey on expenditure, we find that both within-caste comparisons and between-rival-caste comparisons reduce well-being. Between-caste comparisons affect well-being three times more than within-caste comparisons. In absolute value, an increase in rival castes’ expenditure affects well-being as much as own expenditure. These findings highlight the strength of comparisons between rival castes. Yet this comparison scheme turns out to be asymmetrical: only low castes care about the economic successes of their rivals, and only high-caste Indians compete with their fellows. keywords: Subjective Well-being; Relative Utility; Caste classes; India; Panel Data ∗The previous version of the paper was circulated under the titles of “Economic Comparison and Group Identity: Lessons from India”. We are grateful to Shinsuke Ikeda, Fumio Ohtake, and Yoshiro Tsutsui for allowing us to use original data from “Survey on Preferences toward, and Satisfaction with, Life” of Osaka University. We are also grateful to the CEPREMAP and the India Research Group for providing us the Indian National Sample Survey data. We would like to thank Alpaslan Akay, Andrew Clark, Ashwini Desphpande, Rakesh Gupta, Clément Imbert, Claudia Senik, Zahra Siddique and Pankaj Verma for their helpful comments, as well as the participants of the World-Bank / IZA 2012 conference. Financial support provided from JSPS research fund KAKEN (24683006), is appreciated. Any remaining error is the sole responsibility of the authors. †Paris School of Economics and Sciences-Po. Corresponding author: [email protected] ‡ISER, Osaka University and MOVE, Universitat Autonoma de Barcelona