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Gambling to leapfrog in status?

Author

Listed:
  • Tim Friehe

    (University of Marburg
    CESifo)

  • Mario Mechtel

    (Leuphana University of Lüneburg
    IAAEU)

Abstract

This paper tests our theoretical prediction that households with positional concerns use gambling to attempt leapfrogging in the social hierarchy. We rely on household data that is representative for Germany and proxy the households’ positional concerns by their expenditures for conspicuous consumption. Our empirical results strongly indicate that households who care about status are not only more likely to participate in gambling but also to invest more in gambling.

Suggested Citation

  • Tim Friehe & Mario Mechtel, 2017. "Gambling to leapfrog in status?," Review of Economics of the Household, Springer, vol. 15(4), pages 1291-1319, December.
    • Handle: RePEc:kap:reveho:v:15:y:2017:i:4:d:10.1007_s11150-015-9306-9
    DOI: 10.1007/s11150-015-9306-9
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    7. Thomas A. Garrett & David Paton & Leighton Vaughan Williams, 2020. "Taxing Gambling Machines To Enhance Public and Private Revenue," Kyklos, Wiley Blackwell, vol. 73(4), pages 500-523, November.
    8. Tim Friehe & Mario Mechtel & Markus Pannenberg, 2014. "Positional Income Concerns: Prevalence and Relationship with Personality and Economic Preferences," IAAEU Discussion Papers 201411, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
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    More about this item

    Keywords

    Conspicuous consumption; Status; Relative income; Gambling; Behavioral economics;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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