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Towards a Theory of Self-Segregation as a Response to Relative Deprivation: Steady-State Outcomes and Social Welfare

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  • Stark, Oded
  • Wang, You Qiang

Abstract

We model group formation as a response to relative deprivation. We employ two measures of relative deprivation. We show that in the case of each of these measures the process of deprivation-induced self-selection into groups reaches a steady state, and that the steady-state distribution differs from the distribution that would have obtained had group affiliation been chosen so as to maximize rank. We study the social welfare implications of the deprivation-induced process of group formation and show that when individuals are left to pursue their betterment, the resulting state tends to fall short of the best social outcome. We present several implications of the model including federalism and the demand for secession.

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  • Stark, Oded & Wang, You Qiang, 2005. "Towards a Theory of Self-Segregation as a Response to Relative Deprivation: Steady-State Outcomes and Social Welfare," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 223-242.
    • Handle: RePEc:zbw:espost:234331
    DOI: 10.1093/0199286280.003.0010
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    9. Bruno S. Frey, 2018. "Economics of Happiness," SpringerBriefs in Economics, Springer, number 978-3-319-75807-7, October.
    10. Wimmer, Andreas & Schetter, Conrad, 2002. "State-Formation First. Recommendations For Reconstruction And Peace-Making In Afghanistan," Discussion Papers 18740, University of Bonn, Center for Development Research (ZEF).
    11. Stark, Oded, 1990. "A Relative Deprivation Approach to Performance Incentives in Career Games and Other Contests," Kyklos, Wiley Blackwell, vol. 43(2), pages 211-227.
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    14. David Andolfatto, 2002. "A Theory of Inalienable Property Rights," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 382-393, April.
    15. Oded Stark & J. Taylor, 1989. "Relative deprivation and international migration oded stark," Demography, Springer;Population Association of America (PAA), vol. 26(1), pages 1-14, February.
    16. Stark, Oded, 2000. "On a Variation in the Economic Performance of Migrants by their Home Country's Wage," Discussion Papers 281248, University of Bonn, Center for Development Research (ZEF).
    17. Oded Stark, 1991. "The Migration of Labor," Blackwell Books, Wiley Blackwell, number 1557860300, June.
    18. Stark,Oded, 1999. "Altruism and Beyond," Cambridge Books, Cambridge University Press, number 9780521663731.
    19. Msuya, John, 1999. "Nutrition Improvement Projects in Tanzania: Appropriate Choice of Institutions Matters," Discussion Papers 280058, University of Bonn, Center for Development Research (ZEF).
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    Cited by:

    1. Haagsma, Rein, 2018. "Income inequality and saving in a class society: The role of ordinal status," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 12, pages 1-31.
    2. Stark, Oded, 2006. "Inequality and migration: A behavioral link," Economics Letters, Elsevier, vol. 91(1), pages 146-152, April.
    3. Haagsma, Rein, 2018. "Income inequality and saving in a class society: The role of ordinal status," Economics Discussion Papers 2018-12, Kiel Institute for the World Economy (IfW Kiel).
    4. 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.
    5. Stark, Oded, 2019. "Behavior in reverse: reasons for return migration," Behavioural Public Policy, Cambridge University Press, vol. 3(1), pages 104-126, May.
    6. Nicole Immorlica & Rachel Kranton & Mihai Manea & Greg Stoddard, 2017. "Social Status in Networks," American Economic Journal: Microeconomics, American Economic Association, vol. 9(1), pages 1-30, February.
    7. Stark, Oded, 2013. "On the Economics of Others," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue 5, pages 709-715.
    8. Stark, Oded & Fan, C. Simon, 2006. "A Reluctance to Assimilate," Discussion Papers 7125, University of Bonn, Center for Development Research (ZEF).
    9. Stark, Oded & Micevska, Maja & Mycielski, Jerzy, 2009. "Relative poverty as a determinant of migration: Evidence from Poland," Economics Letters, Elsevier, vol. 103(3), pages 119-122, June.

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