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Social Capital and Relative Income Concerns: Evidence from 26 Countries

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Author Info
Justina A.V. Fischer
Benno Torgler

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Abstract

Research evidence on the impact of relative income position on individuals’ attitudes and behaviour is sorely lacking. Therefore, using the International Social Survey Programme 1998 data from 26 countries this paper investigates the impact of relative income on 14 measurements of social capital. We find support for a considerable deleterious positional concern effect of persons below the reference income. This effect is more sizeable by far than the beneficial impact of a relative income advantage. Most of the results indicate that such an effect is non-linear. Lastly, changing the reference group (regional versus national) produces no significant differences in the results.

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Paper provided by Center for Research in Economics, Management and the Arts (CREMA) in its series CREMA Working Paper Series with number 2007-05.

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Date of creation: Jan 2007
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Handle: RePEc:cra:wpaper:2007-05

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Related research
Keywords: Relative income; positional concerns; social capital; social norms; happiness;

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Find related papers by JEL classification:
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology
I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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  1. Fischer, Justina AV, 2008. "Competition and well-being: does market competition make people unhappy?," Working Paper Series in Economics and Finance 697, Stockholm School of Economics. [Downloadable!]
  2. D'Angelo, Emanuela & Lilla, Marco, 2007. "Is there more than one linkage between Social Network and Inequality?," IRISS Working Paper Series 2007-12, IRISS at CEPS/INSTEAD. [Downloadable!]
  3. Markus Schaffner & Benno Torgler, 2008. "Meet the Joneses: An Empirical Investigation of Reference Groups in Relative Income Position Comparisons," School of Economics and Finance Discussion Papers and Working Papers Series 234, School of Economics and Finance, Queensland University of Technology, revised 17 Jun 2008. [Downloadable!]
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