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This paper analyzes the determinants of the stated income insufficiency in Brazil, highlighting the important role of regional characteristics in the subjective measures of wellbeing. Analyses are based on self-reported indicators of the Brazilian Family Budget Survey 2003 and 2009. Income insufficiency was defined as the self-reported lack of income, partial or total, in order to have a normal life. A two-stage estimation strategy is proposed in order to obtain more efficient estimators of the relation between regional characteristics and stated wellbeing. In the first stage, logistic models estimate the family socioeconomic determinants of the income insufficiency. The second stage estimates the regional determinants of income insufficiency by considering spatial relations in the unobservable errors (Spatial Error Model). Results confirm the relative efficiency of the Spatial Error Model and highlight the important role of the level of regional income and educational attainment in the stated perception of wellbeing. Income insufficiency depends both on family absolute income and on relative regional income. In turn, educational attainment affects both individual perceptions of wellbeing and regional aspirations for a normal life. Moreover, results also indicate that urban residents are more likely to declare income insufficiency than rural residents, holding constant other socioeconomic characteristics. 

subjective indicators; inequality; spatial error model