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Keeping up with the Kardashians: Evidence from a choice experiment with a nationally representative sample

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  • Gajderowicz, Tomasz
  • Kozłowski, Roman
  • Giergiczny, Marek
  • Krawczyk, Michał

Abstract

This study aims at investigating preferences regarding nominal income, standing in income distribution, and income change over time. We use a nationally representative sample and employ the Discrete Choice Experiment methodology in the random utility framework. We estimate trade-offs between the absolute income, income change over time, and relative standing in income distribution. The general finding is that the importance of relative income is greater for wealthier respondents; moreover, respondents are willing to sacrifice a large amount of their overall well-being for a constant upward trend in their earnings during their life cycle. Males are particularly sensitive to relative income: they are willing to “burn” nominal money to reach a higher status, also controlling for wealth. Our study provides evidence for the driving force behind the pursuit of wealth in more affluent countries. Despite high aggregate consumption levels, there is a concern for status as measured by relative standing in society and own income change over time.

Suggested Citation

  • Gajderowicz, Tomasz & Kozłowski, Roman & Giergiczny, Marek & Krawczyk, Michał, 2023. "Keeping up with the Kardashians: Evidence from a choice experiment with a nationally representative sample," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 106(C).
    • Handle: RePEc:eee:soceco:v:106:y:2023:i:c:s2214804323001003
    DOI: 10.1016/j.socec.2023.102074
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    More about this item

    Keywords

    Relative income; Income distribution; Income trend; Happiness; Well-being;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D3 - Microeconomics - - Distribution
    • D6 - Microeconomics - - Welfare Economics
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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