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Social Capital and Relative Income Concerns: Evidence from 26 Countries

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  • Justina Fischer
  • Benno Torgler

Abstract

Research on the effects of positional concerns on individuals’ attitudes and behaviour is sorely lacking. Therefore, using the International Social Survey Programme 1998 data on 25’000 individuals from 26 countries this paper investigates the impact of relative income position on facets of social capital, covering horizontal and vertical trust as well as norm compliance. Testing relative deprivation theory, we identify a deleterious positional income effect for persons below the reference income, the absolute size of which far outweighs that of relative income advantage. In contrast, social capital rises in absolute income, while distributional fairness perceptions partially mediate relative income effects.

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Bibliographic Info

Paper provided by Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 38.

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Date of creation: 2008
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Handle: RePEc:twi:respas:0038

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Keywords: Relative income; positional concerns; social capital; social norms; deprivation theory;

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Citations

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Cited by:
  1. Markus Schaffner & Benno Torgler, 2008. "Meet the Joneses: An Empirical Investigation of Reference Groups in Relative Income Position Comparisons," CREMA Working Paper Series 2008-13, Center for Research in Economics, Management and the Arts (CREMA).
  2. Fischer, Justina AV, 2008. "The Welfare Effects of Social Mobility," MPRA Paper 16339, University Library of Munich, Germany, revised Jun 2009.
  3. 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.
  4. 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.
  5. Maurizio Pugno, 2008. "The Easterlin paradox and the decline of social capital: an integrated explanation," Working Papers 2008-02, Universita' di Cassino, Dipartimento di Scienze Economiche.
  6. Fischer, Justina AV, 2009. "The Welfare Effects of Social Mobility: An Analysis for OECD countries," MPRA Paper 17070, University Library of Munich, Germany.

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