Page 69 - Contributed Paper Session (CPS) - Volume 4

CPS2128 Wlodzimierz Okrasa et al.
Deprivation (MILD) for 2478 communes /gminas (NUTS5), composed of eleven
(pre-selected) domains of deprivation - each characterized by a number of
original items: ecology – finance – economy – infrastructure – municipal
utilities – culture – housing – social assistance – labour market – education –
health [65 items]
c. Individual and community level factors of subjective well-being
Basic Wellbeing Equation – important types of tradeoff/ balance.
• Approximation of wellbeing equation (originally ‘life satisfaction
equation’, eg. Clark (2018)) allows to consider first the classic
hypothesis of work (time, h- hours) vs. earning (Y) tradeoff, including
also auxiliary covariates (X):
Well-Being = β1Y + β2h + θ'X + ε (2)
• Complementary to the above considerations lead to checking the role
of community's social capital, the role of which can (hipothetically) be
interpreted in terms of 'compensating variation' (CV) as discussed by
Anand and Montovani (2018).
Formally, a life satisfaction equation can be re-written as:
( , ) = ( , , ) (3)
0
0
1
1
0
0
where y is household income, SC stands for SC, and CV for compensating
variation (of CV for y), which can be can be obtained by identifying the utility
gain derived from a unit increase in social capital. Accordingly, the expected
utility given any particular value of social capital can be written as:
(|,,) = 0+++′+ (4)
where X represents all additional covariates. Following Anand and
Montovani (2018), CV can be be defined as
= / . (5)
d. Individual well-being and community well-being relationship - a
multilevel model (Subramanian (2010), Lloyd (2011) ). Using notations:
- ; well-being of i individual in j commune/gmin ;

- predictor of indywidual (level-1) – such as: age. education. or
satisfaction (e.g. from life in a community. family life . etc.)
- predictor of level-2 / (macro-level): Multideminsonal Index of Local
Deprivation for jcommune/gmina /MILDj
Model for level-1: = + + 0 (6)

1 1
0
where: 0 – refers to 0 average score on a well-being scale in j-th
commune/gmina (eg.. . ‘less affluent' or ‘low-income’. etc.. for cases < Me. 0
=1);
– average differentiation of individual well-being associated with individual
1
material status . ( 1 ). across all territorial units (communes/gminas;); 0 –
residual term for the level-1. Two-level model can be specified as below:

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