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Lifestyle conformity and lifecycle saving: a Veblenian perspective


  • Martha A. Starr


Since the 1950s, the lifecycle hypothesis has been the dominant explanation for the 'inverse U' in household wealth accumulation. This paper advances an alternative explanation, rooted in the ideas of Veblen, that emphasises the role of lifestyle conformity: Because people tend to adopt lifestyles common to their social group and modify them in standard ways as they age, lifecycle norms impart a certain order to the accumulation of assets and liabilities, which enables people to 'do' lifecycle saving via habitual thinking. After laying out the argument conceptually, the paper provides empirical evidence on the role of conformity in lifecycle saving and discusses its contribution to the current low saving rate in the USA. Copyright The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

Suggested Citation

  • Martha A. Starr, 2009. "Lifestyle conformity and lifecycle saving: a Veblenian perspective," Cambridge Journal of Economics, Oxford University Press, vol. 33(1), pages 25-49, January.
  • Handle: RePEc:oup:cambje:v:33:y:2009:i:1:p:25-49

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    References listed on IDEAS

    1. Paul Davidson, 1994. "Post Keynesian Macroeconomic Theory," Books, Edward Elgar Publishing, number 124.
    2. Philip Arestis & Stephen P. Dunn & Malcolm Sawyer, 1999. "Post Keynesian Economics and Its Critics," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 21(4), pages 527-549, July.
    3. Paul Davidson, 1991. "Is Probability Theory Relevant for Uncertainty? A Post Keynesian Perspective," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 129-143, Winter.
    4. Sheila C. Dow, 1999. "Post Keynesianism and Critical Realism: What Is the Connection?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 22(1), pages 15-33, September.
    5. Paul Davidson, 1996. "Reality and Economic Theory," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 18(4), pages 479-508, July.
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    Cited by:

    1. Iuliana Petronela Gardan & Daniel Adrian Gardan & Gheorghe Epuran, 2015. "Social Factors Influence From The Perspective Of Dental Healthcare Services Consumers’ Behavior," Studies and Scientific Researches. Economics Edition, "Vasile Alecsandri" University of Bacau, Faculty of Economic Sciences, issue 22.
    2. Mark Fox & Lane David & Grant Black, 2011. "Competitive Forces in the US Recreational Vehicle Industry," Chapters,in: Handbook on the Economics of Leisure, chapter 20 Edward Elgar Publishing.
    3. Daniel Adrian, GÂRDAN & Iuliana Petronela, GÂRDAN (GEANGU), 2015. "Healthcare Services Consumer Behavior In The Light Of Social Norms Influence," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 6(1), pages 19-24.

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