Advanced Search
MyIDEAS: Login to save this paper or follow this series

Conspicuous consumption and satisfaction

Contents:

Author Info

  • Rainer Winkelmann

Abstract

Traditional tools of welfare economics identify the envy-related welfare loss from conspicuous consumption only under very strong assumptions. Measured income and life satisfaction offers an alternative for estimating such consumption externalities. The approach is developed in the context of luxury car consumption (Ferraris and Porsches) in Switzerland. Results from household panel data and fixed effects panel regressions suggest that the prevalence of luxury cars in the municipality of residence has a negative impact on own income satisfaction.

Download Info

If 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.
File URL: http://www.econ.uzh.ch/static/wp/econwp030.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Department of Economics - University of Zurich in its series ECON - Working Papers with number 030.

as in new window
Length:
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:zur:econwp:030

Contact details of provider:
Postal: Blümlisalpstrasse 10, CH-8006 Zürich
Phone: +41-1-634 22 05
Fax: +41-1-634 49 07
Email:
Web page: http://www.econ.uzh.ch/
More information through EDIRC

Related research

Keywords: Ferrari; Porsche; status; consumption externality; Swiss Household Panel;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Rafael Di Tella & John Haisken-De New & Robert MacCulloch, 2007. "Happiness Adaptation to Income and to Status in an Individual Panel," NBER Working Papers 13159, National Bureau of Economic Research, Inc.
  2. Alois Stutzer & Bruno S. Frey, 2008. "Stress that Doesn't Pay: The Commuting Paradox," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(2), pages 339-366, 06.
  3. Kuhn, Peter J. & Kooreman, Peter & Soetevent, Adriaan R. & Kapteyn, Arie, 2010. "The Effects of Lottery Prizes on Winners and their Neighbors: Evidence from the Dutch Postcode Lottery," IZA Discussion Papers 4950, Institute for the Study of Labor (IZA).
  4. Clark, Andrew E. & Oswald, Andrew J., 1994. "Satisfaction and comparison income," CEPREMAP Working Papers (Couverture Orange) 9408, CEPREMAP.
  5. Lars P. Feld & Justina A. V. Fischer & Gebhard Kirchgassner, 2006. "The effect of direct democracy on income redistribution: evidence for Switzerland," LSE Research Online Documents on Economics 19287, London School of Economics and Political Science, LSE Library.
  6. Alesina, Alberto F & Di Tella, Rafael & MacCulloch, Robert, 2001. "Inequality and Happiness: Are Europeans and Americans Different?," CEPR Discussion Papers 2877, C.E.P.R. Discussion Papers.
  7. Bernard M.S. van Praag & B.E. Baarsma, 2004. "Using Happiness Surveys to value Intangibles; the Case of Airport Noise," Tinbergen Institute Discussion Papers 04-024/3, Tinbergen Institute.
  8. Rablen, Matthew D. & Oswald, Andrew J., 2007. "Mortality and Immortality," IZA Discussion Papers 2560, Institute for the Study of Labor (IZA).
  9. Johansson-Stenman, Olof & Martinsson, Peter, 2004. "Honestly, why are you driving a BMW?," Working Papers in Economics 141, University of Gothenburg, Department of Economics.
  10. Alan B. Krueger & David A. Schkade, 2007. "The Reliability of Subjective Well-Being Measures," NBER Working Papers 13027, National Bureau of Economic Research, Inc.
  11. Simon Luechinger, 2009. "Valuing Air Quality Using the Life Satisfaction Approach," Economic Journal, Royal Economic Society, vol. 119(536), pages 482-515, 03.
  12. Christopher K. Hsee & Fei Xu & Ningyu Tang, 2008. "Two Recommendations on the Pursuit of Happiness," The Journal of Legal Studies, University of Chicago Press, vol. 37(S2), pages S115-S132, 06.
  13. R. Veenhoven, 2008. "Healthy happiness: effects of happiness on physical health and the consequences for preventive health care," Journal of Happiness Studies, Springer, vol. 9(3), pages 449-469, September.
  14. Kerwin Kofi Charles & Erik Hurst & Nikolai Roussanov, 2009. "Conspicuous Consumption and Race," The Quarterly Journal of Economics, MIT Press, vol. 124(2), pages 425-467, May.
  15. J. Solnick, Sara & Hemenway, David, 1998. "Is more always better?: A survey on positional concerns," Journal of Economic Behavior & Organization, Elsevier, vol. 37(3), pages 373-383, November.
  16. Ori Heffetz, 2011. "A Test of Conspicuous Consumption: Visibility and Income Elasticities," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1101-1117, November.
  17. Kahneman, Daniel & Thaler, Richard H, 1991. "Economic Analysis and the Psychology of Utility: Applications to Compensation Policy," American Economic Review, American Economic Association, vol. 81(2), pages 341-46, May.
  18. Layard, Richard, 1980. "Human Satisfactions and Public Policy," Economic Journal, Royal Economic Society, vol. 90(363), pages 737-50, December.
  19. Erzo F.P. Luttmer, 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," NBER Working Papers 10667, National Bureau of Economic Research, Inc.
  20. Bruno Frey & Simon Luechinger & Alois Stutzer, 2009. "The life satisfaction approach to valuing public goods: The case of terrorism," Public Choice, Springer, vol. 138(3), pages 317-345, March.
  21. David Neumark & Andrew Postlewaite, 1995. "Relative Income Concerns and the Rise in Married Women's Employment," NBER Working Papers 5044, National Bureau of Economic Research, Inc.
  22. Karen E. Dynan & Enrichetta Ravina, 2007. "Increasing Income Inequality, External Habits, and Self-Reported Happiness," American Economic Review, American Economic Association, vol. 97(2), pages 226-231, May.
  23. KennethJ. Arrow & ParthaS. Dasgupta, 2009. "Conspicuous Consumption, Inconspicuous Leisure," Economic Journal, Royal Economic Society, vol. 119(541), pages F497-F516, November.
  24. Rablen, Matthew D. & Oswald, Andrew J., 2008. "Mortality and immortality: The Nobel Prize as an experiment into the effect of status upon longevity," Journal of Health Economics, Elsevier, vol. 27(6), pages 1462-1471, December.
  25. Bill Dupor & Wen-Fang Liu, 2003. "Jealousy and Equilibrium Overconsumption," American Economic Review, American Economic Association, vol. 93(1), pages 423-428, March.
  26. Liliana Winkelmann & Rainer Winkelmann, 2010. "Does Inequality Harm the Middle Class?," Kyklos, Wiley Blackwell, vol. 63(2), pages 301-316, 05.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Tim Friehe & Mario Mechtel, 2013. "Gambling to Leapfrog in Status?," CESifo Working Paper Series 4174, CESifo Group Munich.
  2. Perez-Truglia, Ricardo, 2013. "A test of the conspicuous–consumption model using subjective well-being data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 146-154.
  3. Safarzyńska, Karolina, 2013. "Evolutionary-economic policies for sustainable consumption," Ecological Economics, Elsevier, vol. 90(C), pages 187-195.
  4. Tim Friehe & Mario Mechtel, 2012. "Conspicuous Consumption and Communism: Evidence from East and West Germany," IAAEU Discussion Papers 201203, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  5. Inga Hillesheim & Mario Mechtel, 2012. "How Much Do Others Matter? Explaining Positional Concerns for Different Goods and Personal Characteristics," IAAEU Discussion Papers 201210, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  6. Hillesheim, Inga & Mechtel, Mario, 2013. "How much do others matter? Explaining positional concerns for different goods and personal characteristics," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 61-77.
  7. Friehe, Tim & Mechtel, Mario, 2014. "Conspicuous consumption and political regimes: Evidence from East and West Germany," European Economic Review, Elsevier, vol. 67(C), pages 62-81.
  8. Bruno Frey & Jana Gallus & Lasse Steiner, 2014. "Open issues in happiness research," International Review of Economics, Springer, vol. 61(2), pages 115-125, June.
  9. Guven, Cahit, 2012. "Reversing the question: Does happiness affect consumption and savings behavior?," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 701-717.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:zur:econwp:030. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marita Kieser).

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.