Page 67 - Contributed Paper Session (CPS) - Volume 4

CPS2128 Wlodzimierz Okrasa et al.
1. Introduction
There are several reasons for focusing on community and individual well-
being relationships, especially in the local development context. Many of them
have been recognized and discussed thoroughly in the literature, challenging
the tradition of using GDP and other economic indicators as measures of social
progress, (Stiglitz et al., 2009), while including subjective values based self-
reported feeling about selected aspects of wellbeing in connection with
community, eg. Phillip and Wong (2017) . In the presented modelling
approach, an empirical application is preceded by discussion of the
measurement and data issues, including problem of creation an analytical
multi-source database (through 'bottom up' integration of units from different
surveys) and construction of the major wellbeing measures: (i)
multidimensional index of local deprivation encompassing eleven
components , each of them being constructed from public-use data file (Local
Data Bank, Statistics Poland), using 'confirmatory' version of factor analysis (for
all 2478 communes (gminas)), and (ii) individual (subjective) well-being
measure derived from the nation-wide Time Use Survey which is substituted
in some contexts by self-reported measures from national surveys on Social
Cohesion or Social Diagnosis). An important methodological question that
arises in modeling the processes underlying cross-level relationships in the
spatial perspective concerns the omitting variable. Since it can be associated
with both micro- (or 'response' variable) and macro- (or predictors) level, the
issue of endogeneity becomes troublesome and demands the evaluation of
possible effect of the crucial omitted variable. Two aspects of this issue is
considered here. On the one hand, it is hypothesized that the level of
community deprivation (or well-being) is a mediating factor that modify the
way in which the residents' material status (income) affects the individual
(subjective) well-being. A path analytic version of structural model is
employed to decompose total effect of the independent variable into the
natural direct and indirect effects (Hong, 2015; Okrasa and Rozkrut, 2018). On
the other hand, social capital - indicated by the intensity of the third sector
organizations' presence in a community - can be interpreted as the amount of
money required to compensate a person for a possible loss in utility (for
instance, like when price is rising). The 'compensating variation' approach to
social capital allows to identify the utility gain derived from a unit increase in
social capital (Anand and Montovani, 2018, Okrasa, 2018). Following
exploration of spatial patterning, clustering and spatial dependence (with
GeoDa procedures - Fischer and Getis, 2010) a direct assessment of the spatial
interaction effect on the cross-level relationships is also attempted (Patuelli
and Arbia, 2016) using flow-type data from between-community migration
public statistics. In conclusions, a spatially integrated approach to vertical
(multilevel) and horizontal (across areal units) relationships between individual

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