Tkinter non-ascii error while using search

# -*- coding: utf-8 -*-
from Tkinter import *
# First create application class
class Application(Frame):
    def __init__(self, master=None):
        Frame.__init__(self, master)
        self.pack()
        self.create_widgets()
    # Create main GUI window
    def create_widgets(self):
        self.search_var = StringVar()
        self.search_var.trace("w", lambda name, index, mode: self.update_list())
        self.entry = Entry(self, textvariable=self.search_var, width=13)
        self.lbox = Listbox(self, width=45, height=15)
        self.entry.grid(row=0, column=0, padx=10, pady=3)
        self.lbox.grid(row=1, column=0, padx=10, pady=3)
        # Function for updating the list/doing the search.
        # It needs to be called here to populate the listbox.
        self.update_list()
    def update_list(self):
        search_term = self.search_var.get()

        # Just a generic list to populate the listbox
        #Everything is searchable except the last term.
        #Add your non-ascii and you will se what's the thing.

        lbox_list = ['Adam', 'Lucy', 'Barry', 'Bob',
        'James', 'Frank', 'Susan', 'Amanda', 'Christie', 'Šelo']

        self.lbox.delete(0, END)
        for item in lbox_list:
            if search_term.lower() in item.lower():
                self.lbox.insert(END, item)

root = Tk()
root.title('Filter Listbox Test')
app = Application(master=root)
print 'Starting mainloop()'
app.mainloop()