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Materialism on the March: From Conspicuous Leisure to Conspicuous Consumption?

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  • Paul Frijters
  • Andrew Leigh

Abstract

This paper inserts Veblen’s (1898) concepts of conspicuous leisure and conspicuous consumption into a very simple model. Individuals have the choice to either invest their time into working, leading to easily observable levels of consumption, or into conspicuous leisure, whose effect on utility depends on how observable leisure is. We let the visibility of leisure depend positively on the amount of time an individual and her neighbors have lived in the same area. Individuals optimize across conspicuous leisure and conspicuous consumption. If population turnover is high, individuals are made worse off, since the visibility of conspicuous leisure then decreases and the status race must be played out primarily via conspicuous consumption. Analyzing interstate mobility in the US, we find strong support for our hypothesis: a 1 percentage point rise in population turnover increases the average work week of non-migrants by 7 minutes. The negative externality of population turnover on the visibility of conspicuous leisure is an argument for higher transport taxes.

Suggested Citation

  • Paul Frijters & Andrew Leigh, 2005. "Materialism on the March: From Conspicuous Leisure to Conspicuous Consumption?," CEPR Discussion Papers 495, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  • Handle: RePEc:auu:dpaper:495
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    File URL: https://www.cbe.anu.edu.au/researchpapers/cepr/DP495.pdf
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Could sortition help against corruption, part II
      by Paul Frijters in Club Troppo on 2016-09-19 10:25:33

    Citations

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    Cited by:

    1. Andreas Chai & Wolfhard Kaus, 2013. "Signalling to whom? Conspicuous spending and the local density of the social group income distribution," Papers on Economics and Evolution 2012-18, Philipps University Marburg, Department of Geography.
    2. Collewet, Marion & de Grip, Andries & de Koning, Jaap, 2015. "Conspicuous Work: Peer Working Time, Labour Supply and Happiness for Male Workers," IZA Discussion Papers 9011, Institute for the Study of Labor (IZA).
    3. Sabatini, Fabio & Sarracino, Francesco, 2015. "Keeping up with the e-Joneses: Do online social networks raise social comparisons?," MPRA Paper 65874, University Library of Munich, Germany.
    4. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," Working Papers halshs-00590436, HAL.
    5. Andrew E. Clark & Conchita D'Ambrosio, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," Working Papers halshs-00967938, HAL.
    6. Thomas Aronsson & Olof Johansson-Stenman, 2013. "Conspicuous Leisure: Optimal Income Taxation When Both Relative Consumption and Relative Leisure Matter," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(1), pages 155-175, January.
    7. Mujcic, Redzo & Frijters, Paul, 2015. "Conspicuous consumption, conspicuous health, and optimal taxation," Journal of Economic Behavior & Organization, Elsevier, vol. 111(C), pages 59-70.
    8. Ian Davidoff & Andrew Leigh, 2013. "How Do Stamp Duties Affect the Housing Market?," The Economic Record, The Economic Society of Australia, vol. 89(286), pages 396-410, September.
    9. Goerke, Laszlo, 2013. "Relative consumption and tax evasion," Journal of Economic Behavior & Organization, Elsevier, vol. 87(C), pages 52-65.
    10. Sabatini, Fabio & Sarracino, Francesco, 2016. "Keeping up with the e-Joneses: Do Online Social Networks Raise Social Comparisons?," ET: Economic Theory 234936, Fondazione Eni Enrico Mattei (FEEM).
    11. repec:eee:soceco:v:68:y:2017:i:c:p:79-90 is not listed on IDEAS
    12. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute for the Study of Labor (IZA).
    13. repec:bla:tvecsg:v:108:y:2017:i:2:p:190-204 is not listed on IDEAS
    14. Victoria Ateca-Amestoy, 2011. "Leisure and Subjective Well-being," Chapters,in: Handbook on the Economics of Leisure, chapter 4 Edward Elgar Publishing.
    15. Collewet M.M.F. & Grip A. de & Koning J.d., 2015. "Peer working time, labour supply, and happiness for male workers," ROA Research Memorandum 006, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    16. Yamada, Katsunori, 2008. "Macroeconomic implications of conspicuous consumption: A Sombartian dynamic model," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 322-337, July.
    17. Bogaerts, Tess & Pandelaere, Mario, 2013. "Less is more: Why some domains are more positional than others," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 225-236.

    More about this item

    Keywords

    conspicuous leisure; conspicuous consumption; mobility; labour supply; status races;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • D10 - Microeconomics - - Household Behavior - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • B15 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Historical; Institutional; Evolutionary

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