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Positional Income Concerns: Prevalence and Relationship with Personality and Economic Preferences

Listed author(s):
  • Tim Friehe

    ()

    (Center for Advanced Studies in Law and Economics Rheinische Friedrich-Wilhelms-Universität Bonn)

  • Mario Mechtel

    ()

    (Institute for Labour Law and Industrial Relations in the EU, University of Trier)

  • Markus Pannenberg

    ()

This paper presents detailed evidence about who compares to whom in terms of relative income. We rely on representative survey data on the importance of income comparisons vis-a-vis seven reference groups, allowing us to exploit within subject heterogeneity. We explore the prevalence and determinants of positional income concerns, investigating the role of personality and economic preferences. Our results establish robust relationships between positional income concerns and the personality traits agreeableness, conscientiousness, and neuroticism, some of which depend on the reference group. Furthermore, risk and fairness preferences are signi cantly correlated with positional income concerns.

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File Function: First version, 2014
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Paper provided by Institute of Labour Law and Industrial Relations in the European Union (IAAEU) in its series IAAEU Discussion Papers with number 201411.

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Date of creation: Nov 2014
Handle: RePEc:iaa:dpaper:201411
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