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A Theory of Self-Segregation as a Response to Relative Deprivation

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  • Stark, Oded

    (University of Oslo and University of Vienna)

  • You Qiang Wang

    (The Chinese University of Hong Kong)

Abstract

We model group formation as a response to relative deprivation. We employ a simple measure of relative deprivation. We show that the process of deprivation-induced self-selection into groups reaches a unique steady state. 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.

Suggested Citation

  • Stark, Oded & You Qiang Wang, 2002. "A Theory of Self-Segregation as a Response to Relative Deprivation," Royal Economic Society Annual Conference 2002 168, Royal Economic Society.
  • Handle: RePEc:ecj:ac2002:168
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    Cited by:

    1. Oded Stark & Walter Hyll, 2011. "On the Economic Architecture of the Workplace: Repercussions of Social Comparisons among Heterogeneous Workers," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 349-375.
    2. C. Simon Fan & Oded Stark, 2011. "A Theory Of Migration As A Response To Occupational Stigma," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 549-571, May.

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