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L'hypothèse d'utilité relative dans l'analyse économique :enjeux et conséquences

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  • Thi Kim Cuong Pham

Abstract

Homo oeconomicus’s utility function assumes the absence of social interactions and the independence of individual preferences. This utility function, defined over absolute income, receives numerous studies based on experimental and survey data. In this paper, I begin by outlying some empirical results in favour of the relativity of utility. The relative utility hypothesis postulates that individual compares his income to a reference level so that his welfare partly depends on his relative position. The latter is viewed as individual’s social status. I also present the consequences of status-seeking on normative property of decentralized equilibrium, on corrected taxation and optimal redistributive taxation. The paper also emphasizes that status-seeking may be considered as an argument explaining economic growth and others related phenomena such as inequality, welfare dynamics, social stratification and taxation which leads to optimal economic growth.

Suggested Citation

  • Thi Kim Cuong Pham, 2008. "L'hypothèse d'utilité relative dans l'analyse économique :enjeux et conséquences," Revue d'économie politique, Dalloz, vol. 118(4), pages 541-572.
  • Handle: RePEc:cai:repdal:redp_184_0541
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    References listed on IDEAS

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    1. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
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    Cited by:

    1. 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.

    More about this item

    Keywords

    welfare; economic growth; public policy; social status; relative utility;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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