Mònica Guillén-Royo is currently finishing the paper ‘Adequacy of life domains and relative consumption in Peru’. The article is the culmination of five years of research on consumption and wellbeing in this Latin-American country. The study discusses the relationship between the consumption of the reference group (the group whom people compare themselves with) and people’s wellbeing in seven poor Peruvian communities. It shows, in opposition to what is usually expected, that what others consume might have a greater impact on people’s wellbeing than their own consumption levels.

Guillen-Royo conducted fieldwork in Huaycan, a shanty town of Lima, as a member of the Wellbeing in Developing Countries (WeD), ESRC Research group (www.welldev.org.uk) at the University of Bath (UK). Her research also draws from qualitative and quantitative data on consumption, needs and subjective wellbeing collected by the WeD group in Huaycan and six other Peruvian neighbourhoods. The communities spanned the region from the Andean Central highlands into Lima and showed not only geographical diversity but also different degrees of urbanization, access to markets, ethnicity and language. Participants had one feature in common: they were all poor for Peruvian standards as 91% fell under the national poverty line.

- It is not common to expect that relative position matters over absolute conditions for people living in poverty. ‘Keeping up with the Joneses’ is a feature of consumption that has traditionally been used to explain why economic growth does not always result in greater happiness in rich countries. However, recent studies confirm that the consumption of the reference group and one’s social position are important aspects explaining people’s wellbeing in poor and middle-income countries. In Latin-America, economic comparisons have been shown, in some cases, to offset the beneficial effects of a higher income, explains the researcher.

Guillen-Royo’s article focuses on poor people's appraisal of life domains. Using qualitative and quantitative data she investigates how assessments of the adequacy of health care, housing, children's education, clothes, food and non-food consumption are related to average consumption in the community. She finds that having richer neighbours reduces people’s satisfaction with children’s education, family's clothes and housing.

- Housing is one of the most conspicuous domains. In the seven Peruvian communities, a ‘quality’ house identified by its construction materials and the available utilities and durables, signals wealth and status. The more money is spent on housing in the community the more likely a person will appraise her dwelling as inadequate. The interesting thing is that this negative effect might even offset the positive impact of an improvement of her own housing conditions.

However, not all domains are as sensitive to comparisons. Adequacy of healthcare and food are mainly explained by the household level of basic needs; the less deprived is the household the higher people’s satisfaction. Not experiencing food shortages or economic shocks and having access to safe drinking water are more important for food appraisal than the consumption of others. This is also the case for healthcare since what matters is being treated when one is ill, not whether others have more money to afford a better treatment. The study also finds that a richer reference group is not always detrimental. When people appraise non-food consumption in general, and not the adequacy of particular domains, relative standing is all that matters and has a positive effect.

- Appraisals of health care, housing and education were likely to account for past and current consumption. They included a historical, more structural perspective than the one captured through the question on non-food consumption; which was restricted to expenditure in the months prior to the survey. In addition to health care, housing, education and clothes, non-food consumption incorporated expenditure on durables, festivals, furniture, transport and communications among other items. That having richer neighbours has a positive effect on people’s assessments has been interpreted in the literature as a sign of altruism. WeD ethnographic and qualitative data indicated that the yields from a good harvest, for example, are distributed in rural communities through a generously organized festivity whilst better job opportunities result in more gifts and donations to family, kin and neighbours. In Huaycan, this includes everything from providing tap water to supplying free services (mending shoes and lending one’s landline for free, for instance) to the poorer neighbours.

The study also finds that slum dwellers perceive all domains to be less adequate than non-urban people. This was somehow expected, as in urban shanties people are more exposed to sophisticated and ‘modern’ goods, which might be owned by richer neighbours and/or displayed in wealthy neighbourhoods and shopping malls. Higher exposure to more ‘western’ consumption patterns is likely to increase feelings of inadequacy.

Mònica studied economics at the Universitat Autònoma de Barcelona, she holds a master in Applied Economics from the same university and a Master in European Social Policy from the University of Bath. She defended her PhD thesis ‘Consumption and wellbeing: motives for consumption and needs satisfiers in Peru’ in March 2007 and was awarded a one year Post-doctoral Fellowship by the Economic and Social Research Council (ESRC) in the UK shortly after. She is currently Guest Researcher at SUM and works part-time as coordinator of Norlarnet.

Regarding the implications of her study Guillen-Royo says:
- This research together with my earlier work highlights, among other issues, the relevance of fighting inequality and social exclusion and not simply relying on economic growth. This is particularly relevant in areas such as housing and education where the anguish of a lower relative performance is more significant. It also points to the need for more traditional intervention regarding food and health care. These are domains where people are more concerned about satisfying physiological needs than improving relative standing. Finally, my work calls for a promotion of the existing community networks and solidarity traditions. This is especially important in urban slums where robberies and assaults together with corrupt police forces might undermine the traditional reciprocity and altruism of the Peruvian population.