Last week we discussed a recent Central Bureau of Statistics report summarizing the economic situation of Israeli Arabs. These specialized reports are important because Israel's poverty problem is specialized, that is, heavily concentrated in specific sectors. We noted that there is no narrowing of the income gap between Jews and Arabs in Israel, but in certain important measures of standard of living such as living area there is a noticeable relative improvement. We also noted that the very low, and decreasing, labor force participation rate of Israeli Arab women will make it difficult for this population sector to close the economic gaps separating them from the Jewish population. However, well-being is not only a function of income or other economic variables. One example is the one just mentioned: the custom in Israeli Arab households is for the wife to stay at home rather than going out to work. While this reduces the monetary income of these households, they obviously value the wife's presence in the home more than they value the money she could have earned in the workplace, so it is improper to view the lower income as a disadvantage. (Except perhaps from a feminist perspective which might view the preference for stay-at-home wives as a preference of the men and not the women.) In order to get an overall idea of other factors affecting well being, I compared various measures of well-being for Israeli Arabs and Israeli Jews, based on the 1999/2000 World Values survey and the 2006 Israeli Social Survey. Not only is perceived well-being dependent on many factors besides income; the dependence on income itself varies widely among communities. Among non-Haredi Israeli Jews, the correlation between reported life satisfaction and household income is around 30% - quite high considering the large number of factors that impact life satisfaction (family considerations are the most important). But among Arabs the correlation is much less, as low as 14% in the Social Survey. And for haredi Jews income seems to have no measurable impact on well-being; the correlation is close to zero and is in fact negative in both surveys. On the whole, Arab levels of life satisfaction are somewhat less than those of Jews - 2.9 versus 3.1 on the 4 point Social Survey scale. The World Values Survey shows an even greater gap - 6.2 compared to 7.2 on a ten-point scale. (The haredi Jews are over-the-top in life satisfaction - at 3.6 in the social survey and 8.1 in the World Values Survey.) Men and women give similar scores in all communities. There is always a question about how to interpret different answers among different groups - as differences in satisfaction or merely in survey-answering techniques - but there is a good basis to think that the Israeli Arabs have less life satisfaction overall than Jews. I was surprised to find out that Israeli Arabs are somewhat less likely to be victims of crime; a smaller portion of Arabs than Jews reported that they had experienced a break-in or other robbery in the past year. (The rate for assaults was similar, and quite low, for both communities.) Arabs also reported better relations with their neighbors, and fewer health problems (though this may be related to their lower average age). On the other side, they are somewhat more likely to feel a lack of security (30% vs. 27% for Jews), and much more likely to experience feelings of isolation (38% vs. 30%). An even more extreme case is satisfaction with transportation: about half of Arabs surveyed expressed dissatisfaction with transportation, compared with only about a quarter of Jews. This probably accurately reflects the grave transportation problems faced by Arab localities in particular and the entire Israeli periphery in general. Arab Israelis are also much more likely to be disturbed by pollution and to be dissatisfied with their area of residence. These figures are important because economic equality is generally considered worrisome not so much because of the difference in standard of living per se, but because of the various perils of poverty. In most developed countries, being poor means having a high level of crime, a high level of single parenthood, a high level of misery and so on. In Israel it is not quite true; poverty here is concentrated among the Israeli Arabs and haredi community, where single parenthood is virtually unknown and victimization seems to be actually lower than among the population at large. Arabs do have a lot of dissatisfaction with their areas of residence, which are widely acknowledged to be neglected by government policy and by inept local councils. But the solution to this problem is not to equalize incomes, but rather to pursue directly an improvement in the conditions of Arab localities. The proper policy objective is to avoid a Procrustean-bed approach to our problem, stretching or slicing all situations to fit our preconceived notions. The inequality of Arab Israelis is genuine and requires attention, but any solution must conform to the actual distress of this community while also recognizing their particular strengths.