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Is Concern for Relative Consumption a Function of Relative Consumption?

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  • Andersson, Fredrik W.

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

By using hypothetical choice experiments, this paper presents evidence that individuals' concern for relative consumption depends on their relative consumption. Individuals with consumption levels above society's average consumption level tend to have, in general, lower concern for relative consumption. This supports Duesenberry's (1949) notion that people are more concerned with upward social comparison than with downward social comparison.

Suggested Citation

  • Andersson, Fredrik W., 2006. "Is Concern for Relative Consumption a Function of Relative Consumption?," Working Papers in Economics 220, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0220
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    File URL: http://hdl.handle.net/2077/2691
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    References listed on IDEAS

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    Cited by:

    1. Andrew E. Clark & Claudia Senik, 2010. "Will GDP growth increase happiness in developing countries?," Working Papers halshs-00564985, HAL.
    2. Carlsson, Fredrik & Qin, Ping, 2008. "It is better to be the head of a chicken than the tail of a phoenix: a study of concern for relative standing in rural China," Working Papers in Economics 308, University of Gothenburg, Department of Economics.
    3. Carlsson, Fredrik & Qin, Ping, 2010. "It is better to be the head of a chicken than the tail of a phoenix: Concern for relative standing in rural China," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(2), pages 180-186, April.
    4. Andersson, Fredrik W., 2006. "Consumption Theory with Reference Dependent Utility," Working Papers in Economics 226, University of Gothenburg, Department of Economics.

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    More about this item

    Keywords

    Relative consumption; marginal degree of positionality; choice experiments; questionnaire-experimental methods;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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