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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.

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
    DOI: 10.1111/j.1467-9361.2005.00309.x
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    Cited by:

    1. Camacho, Carmen & Harmankaya, Fatih & Sağlam, Çağrı, 2020. "Social status pursuit, distribution of bequests and inequality," Economic Modelling, Elsevier, vol. 86(C), pages 183-191.
    2. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," PSE Working Papers halshs-00590436, HAL.
    3. Ballet, Jérôme & Marchand, Lucile & Pelenc, Jérôme & Vos, Robin, 2018. "Capabilities, Identity, Aspirations and Ecosystem Services: An Integrated Framework," Ecological Economics, Elsevier, vol. 147(C), pages 21-28.
    4. Francesco Bogliacino & Pietro Ortoleva, 2014. "The Behavior of Others as a Reference Point," Working Papers 2014-4, Princeton University. Economics Department..
    5. Baochun Peng, 2008. "Relative deprivation, wealth inequality and economic growth," Journal of Economics, Springer, vol. 94(3), pages 223-229, September.
    6. Nan Zhao & Wanqing Liao & Jun Xia & Zizhe Zhang, 2023. "The effect of intergenerational mobility on family education investment: evidence from China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 10(1), pages 1-12, December.
    7. 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, pages 153-177, National Bureau of Economic Research, Inc.
    8. 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.
    9. Anandi Mani & Emma Riley, 2019. "Social networks, role models, peer effects, and aspirations," WIDER Working Paper Series wp-2019-120, World Institute for Development Economic Research (UNU-WIDER).
    10. 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.
    11. 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.
    12. Isidro Soloaga & Alejandra Villegas & Raymundo Campos, 2022. "Aspirations, personal traits and neighborhood environment," Working Paper Series Sobre México 2022006, Sobre México. Temas en economía.
    13. Sung Soo Lim, 2020. "The Effects of Chronic Illness on Aspirations and Subjective Wellbeing," Journal of Happiness Studies, Springer, vol. 21(5), pages 1771-1793, June.

    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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