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Status Aspirations, Wealth Inequality, and Economic Growth

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  • Oded Stark

Abstract

This paper argues that an increase in the inequality of wealth prompts a stronger quest for status that in turn fosters the accumulation of wealth. It proposes a measure for an individual's want of social status. For a given level of a population's wealth, the corresponding aggregate measure of want of social status is shown to be positively related to the Gini coefficient of wealth inequality. Hence, the Gini coefficient and growth are positively correlated, holding the population's wealth constant. Copyright © 2006 The Authors; Journal compilation © 2006 Blackwell Publishing Ltd.

Suggested Citation

  • Oded Stark, 2006. "Status Aspirations, Wealth Inequality, and Economic Growth," Review of Development Economics, Wiley Blackwell, vol. 10(1), pages 171-176, February.
  • Handle: RePEc:bla:rdevec:v:10:y:2006:i:1:p:171-176
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    References listed on IDEAS

    as
    1. Fishman, Arthur & Simhon, Avi, 2002. "The Division of Labor, Inequality and Growth," Journal of Economic Growth, Springer, vol. 7(2), pages 117-136, June.
    2. Stark, Oded, 1990. "A Relative Deprivation Approach to Performance Incentives in Career Games and Other Contests," Kyklos, Wiley Blackwell, vol. 43(2), pages 211-227.
    3. Gaspart, Frederic & Seki, Erika, 2003. "Cooperation, status seeking and competitive behaviour: theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 51(1), pages 51-77, May.
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    Cited by:

    1. Mekonnen, Daniel & Gerber, Nicolas, 2015. "The Effect of Aspirations on Agricultural Innovations in Rural Ethiopia," 2015 Conference, August 9-14, 2015, Milan, Italy 211680, International Association of Agricultural Economists.
    2. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    3. Nguyen-Van, Phu & Pham, Thi Kim Cuong, 2013. "Endogenous fiscal policies, environmental quality, and status-seeking behavior," Ecological Economics, Elsevier, vol. 88(C), pages 32-40.
    4. Baochun Peng, 2008. "Relative deprivation, wealth inequality and economic growth," Journal of Economics, Springer, vol. 94(3), pages 223-229, September.
    5. repec:eee:ecolec:v:147:y:2018:i:c:p:21-28 is not listed on IDEAS
    6. Travis J. Lybbert & Bruce Wydick, 2017. "Hope as Aspirations, Agency, and Pathways: Poverty Dynamics and Microfinance in Oaxaca, Mexico," NBER Chapters,in: The Economics of Poverty Traps National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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