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Does Envy Destroy Social Fundamentals? The Impact Of Relative Income Position On Social Capital

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  • Justina A.V. Fischer
  • Benno Torgler

Abstract

Research evidence on the impact of relative income position on individual attitudes and behaviour is sorely lacking. Therefore, this paper assesses such positional impact on social capital by applying 14 different measurements to International Social Survey Programme data from 25 countries. We find support for a positional concern effect or 'envy' whose magnitude in several cases is quite substantial. The results indicate that such an effect is non-linear. In addition, we find an indication that absolute income level is also relevant. Lastly, changing the reference group (regional versus national) produces no significant differences in the results.

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Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers with number 46.

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Date of creation: Feb 2006
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Handle: RePEc:cep:stidep:46

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Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp

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Keywords: Relative income position; envy; positional concerns; social capital; social norms; happiness;

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Cited by:
  1. Fischer, Justina A.V. & Torgler, Benno, 2011. "Do Positional Concerns Destroy Social Capital: Evidence from 26 Countries," MPRA Paper 28650, University Library of Munich, Germany.
  2. Lampi, Elina & Nordblom, Katarina, 2008. "Money and Success –Sibling and Birth-Order Effects on Positional Concerns," Working Papers in Economics 299, University of Gothenburg, Department of Economics.
  3. Stefan Trautmann, 2010. "Individual fairness in Harsanyi’s utilitarianism: operationalizing all-inclusive utility," Theory and Decision, Springer, vol. 68(4), pages 405-415, April.

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