Materialism on the March: From Conspicuous Leisure to Conspicuous Consumption?
AbstractThis paper inserts Veblen’s (1898) concepts of conspicuous leisure and conspicuous consumption into a very simple model. Individuals have the choice to either invest their time into working, leading to easily observable levels of consumption, or into conspicuous leisure, whose effect on utility depends on how observable leisure is. We let the visibility of leisure depend positively on the amount of time an individual and her neighbors have lived in the same area. Individuals optimize across conspicuous leisure and conspicuous consumption. If population turnover is high, individuals are made worse off, since the visibility of conspicuous leisure then decreases and the status race must be played out primarily via conspicuous consumption. Analyzing interstate mobility in the US, we find strong support for our hypothesis: a 1 percentage point rise in population turnover increases the average work week of non-migrants by 7 minutes. The negative externality of population turnover on the visibility of conspicuous leisure is an argument for higher transport taxes.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 495.
Length: 25 pages
Date of creation: Sep 2005
Date of revision:
conspicuous leisure; conspicuous consumption; mobility; labour supply; status races;
Other versions of this item:
- Frijters, Paul & Leigh, Andrew, 2008. "Materialism on the March: From conspicuous leisure to conspicuous consumption?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(5), pages 1937-1945, October.
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- D10 - Microeconomics - - Household Behavior - - - General
- D60 - Microeconomics - - Welfare Economics - - - General
- B15 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Historical; Institutional; Evolutionary
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-03 (All new papers)
- NEP-CBE-2006-06-03 (Cognitive & Behavioural Economics)
- NEP-PKE-2006-06-03 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
- KNIGHT, John & SONG, Lina & GUNATILAKA, Ramani, 2009.
"Subjective well-being and its determinants in rural China,"
China Economic Review,
Elsevier, vol. 20(4), pages 635-649, December.
- John Knight & Lina Song, 2007. "Subjective Well-being and its Determinants in Rural China," Economics Series Working Papers 334, University of Oxford, Department of Economics.
- Alois Stutzer & Rafael Lalive, 2004.
"The Role of Social Work Norms in Job Searching and Subjective Well-Being,"
Journal of the European Economic Association,
MIT Press, vol. 2(4), pages 696-719, 06.
- Alois Stutzer & Rafael Lalive, . "The Role of Social Work Norms in Job Searching and Subjective Well-Being," IEW - Working Papers 051, Institute for Empirical Research in Economics - University of Zurich.
- Stutzer, Alois & Lalive, Rafael, 2001. "The Role of Social Work Norms in Job Searching and Subjective Well-Being," IZA Discussion Papers 300, Institute for the Study of Labor (IZA).
- Ireland, Norman J., 1998. "Status-seeking, income taxation and efficiency," Journal of Public Economics, Elsevier, vol. 70(1), pages 99-113, October.
- Clark, Andrew E. & Oswald, Andrew J., 1994.
"Satisfaction and comparison income,"
CEPREMAP Working Papers (Couverture Orange)
- Van Praag, Bernard M.S., 1977. "The perception of welfare inequality," European Economic Review, Elsevier, vol. 10(2), pages 189-207.
- Stadt, H. van de & Geer, S.A. van de & Kapteyn, A.J., 1985.
"The relativity of utility: Evidence from panel data,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-364325, Tilburg University.
- van de Stadt, Huib & Kapteyn, Arie & van de Geer, Sara, 1985. "The Relativity of Utility: Evidence from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 67(2), pages 179-87, May.
- Layard, Richard, 1980. "Human Satisfactions and Public Policy," Economic Journal, Royal Economic Society, vol. 90(363), pages 737-50, December.
- Bill Dupor & Wen-Fang Liu, 2003. "Jealousy and Equilibrium Overconsumption," American Economic Review, American Economic Association, vol. 93(1), pages 423-428, March.
- Frank, Robert H, 1985. "The Demand for Unobservable and Other Nonpositional Goods," American Economic Review, American Economic Association, vol. 75(1), pages 101-16, March.
- Veblen, Thorstein, 1899. "The Theory of the Leisure Class," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1899.
- Larry Samuelson, 2004. "Information-Based Relative Consumption Effects," Econometrica, Econometric Society, vol. 72(1), pages 93-118, 01.
- Harald Uhlig & Lars Ljungqvist, 2000. "Tax Policy and Aggregate Demand Management under Catching Up with the Joneses," American Economic Review, American Economic Association, vol. 90(3), pages 356-366, June.
- Laszlo Goerke, 2013.
"Relative Consumption and Tax Evasion,"
IAAEU Discussion Papers
201301, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
- Ian Davidoff & Andrew Leigh, 2013.
"How Do Stamp Duties Affect the Housing Market?,"
The Economic Record,
The Economic Society of Australia, vol. 89(286), pages 396-410, 09.
- Aronsson, Thomas & Johansson-Stenman, Olof, 2009.
"Conspicuous Leisure: Optimal Income Taxation when both Relative Consumption and Relative Leisure Matter,"
UmeÃ¥ Economic Studies
774, Umeå University, Department of Economics.
- Thomas Aronsson & Olof Johansson-Stenman, 2013. "Conspicuous Leisure: Optimal Income Taxation When Both Relative Consumption and Relative Leisure Matter," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(1), pages 155-175, 01.
- Aronsson, Thomas & Johansson-Stenman, Olof, 2009. "Conspicuous Leisure: Optimal Income Taxation when both Relative Consumption and Relative Leisure Matter," Working Papers in Economics 358, University of Gothenburg, Department of Economics.
- Andreas Chai & Wolfhard Kaus, 2013. "Signalling to whom? Conspicuous spending and the local density of the social group income distribution," Papers on Economics and Evolution 2012-18, Max Planck Institute of Economics, Evolutionary Economics Group.
- Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," Working Papers halshs-00590436, HAL.
- Redzo Mujcic & Paul Frijters, 2013. "Conspicuous Consumption, Conspicuous Health, and Optimal Taxation," Discussion Papers Series 483, School of Economics, University of Queensland, Australia.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.