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Relative consumption and human capital accumulation

Author

Listed:
  • Vincenzo Lombardo

    () (University Parthenope)

Abstract

This paper shows that the interaction between consumption and production externalities generates multiple equilibria in a simple model in which individuals care of their relative consumption because holding a relatively advantageous position is instrumental to obtain productive benefits.

Suggested Citation

  • Vincenzo Lombardo, 2013. "Relative consumption and human capital accumulation," Economics Bulletin, AccessEcon, vol. 33(2), pages 1091-1100.
  • Handle: RePEc:ebl:ecbull:eb-13-00215
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I2-P103.pdf
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    References listed on IDEAS

    as
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    5. Akay, Alpaslan & Martinsson, Peter, 2011. "Does relative income matter for the very poor? Evidence from rural Ethiopia," Economics Letters, Elsevier, pages 213-215.
    6. Bilancini, Ennio & D'Alessandro, Simone, 2012. "Long-run welfare under externalities in consumption, leisure, and production: A case for happy degrowth vs. unhappy growth," Ecological Economics, Elsevier, vol. 84(C), pages 194-205.
    7. Omer Moav and & Zvika Neeman, 2012. "Saving Rates and Poverty: The Role of Conspicuous Consumption and Human Capital," Economic Journal, Royal Economic Society, vol. 122(563), pages 933-956, September.
    8. Koichi Kawamoto, 2009. "Status-seeking behavior, the evolution of income inequality, and growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 269-289.
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    13. 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.
    14. 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, pages 95-144.
    15. Martin Ravallion & Shaohua Chen, 2011. "Weakly Relative Poverty," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1251-1261, November.
    16. Karen E. Dynan & Enrichetta Ravina, 2007. "Increasing Income Inequality, External Habits, and Self-Reported Happiness," American Economic Review, American Economic Association, pages 226-231.
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    More about this item

    Keywords

    Relative consumption; status concerns; multiple equilibria.;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • D3 - Microeconomics - - Distribution

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