Isolation and Subjective Welfare: Evidence from South Asia

A study was conducted to examine the link between geographical isolation and subjective welfare using 1995/96 Nepal Living Standard Survey (NLSS) data from Nepal. The head of each surveyed household was asked to grade the household's total income as 'not adequate,' 'adequate,' or 'more than adequate.' Similar questions were asked regarding five consumption segments, namely, food, clothing, housing, schooling, and health care. Results show that subjective welfare is negatively correlated with isolation even after leaving out the impact of lower consumption expenditures. The regression results also reflect indirectly on the nature of the isolation-welfare relationship. The relationship between isolation and subjective welfare, therefore, does not seem to rely on whether controls for relative consumption are taken into account or not. Rural dwellers are tempted by the amenities and lifestyle that urban centers offer, namely, accessibility to markets, different kinds of goods and services, and better access to schools and health care.