IDEAS home Printed from https://ideas.repec.org/p/not/notgep/15-02.html
   My bibliography  Save this paper

Relative Social Status and Conflicting Measures of Poverty: A Behavioural Analytical Model

Author

Listed:
  • Sugata Marjit
  • Arijit Mukherjee
  • Koushik Kumar Hati

Abstract

We consider a situation where the relatively ‘poor’ are concerned about their relative income status with respect to a relevant reference group. Such a concern is explicitly introduced in a utility function to study the consumption behavior of the poor. We point towards a possible conflict between income based and nutrition-based measure of poverty. Changes in income distribution generate non-homothetic outcome for an “otherwise homothetic” preference structure and may convert an “otherwise normal” good into an inferior good.

Suggested Citation

  • Sugata Marjit & Arijit Mukherjee & Koushik Kumar Hati, 2015. "Relative Social Status and Conflicting Measures of Poverty: A Behavioural Analytical Model," Discussion Papers 2015-02, University of Nottingham, GEP.
  • Handle: RePEc:not:notgep:15/02
    as

    Download full text from publisher

    File URL: https://www.nottingham.ac.uk/gep/documents/papers/2015/2015-02.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kerwin Kofi Charles & Erik Hurst & Nikolai Roussanov, 2009. "Conspicuous Consumption and Race," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 425-467.
    2. Frank, Robert H, 1985. "The Demand for Unobservable and Other Nonpositional Goods," American Economic Review, American Economic Association, vol. 75(1), pages 101-116, March.
    3. van de Stadt, Huib & Kapteyn, Arie & van de Geer, Sara, 1985. "The Relativity of Utility: Evidence from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 67(2), pages 179-187, May.
    4. Omer Moav and & Zvika Neeman, 2012. "Saving Rates and Poverty: The Role of Conspicuous Consumption and Human Capital," Economic Journal, Royal Economic Society, vol. 122(563), pages 933-956, September.
    5. Francis Bloch & Vijayendra Rao & Sonalde Desai, 2004. "Wedding Celebrations as Conspicuous Consumption: Signaling Social Status in Rural India," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
    6. Khamis, Melanie & Prakash, Nishith & Siddique, Zahra, 2012. "Consumption and social identity: Evidence from India," Journal of Economic Behavior & Organization, Elsevier, vol. 83(3), pages 353-371.
    7. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 963-1002.
    8. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
    9. Redzo Mujcic & Paul Frijters, 2013. "Economic choices and status: measuring preferences for income rank," Oxford Economic Papers, Oxford University Press, vol. 65(1), pages 47-73, January.
    10. Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1092-1125, December.
    11. Chao, Angela & Schor, Juliet B., 1998. "Empirical tests of status consumption: Evidence from women's cosmetics," Journal of Economic Psychology, Elsevier, vol. 19(1), pages 107-131, February.
    12. Easterlin, Richard A., 1974. "Does Economic Growth Improve the Human Lot? Some Empirical Evidence," MPRA Paper 111773, University Library of Munich, Germany.
    13. Ireland, Norman J., 1994. "On limiting the market for status signals," Journal of Public Economics, Elsevier, vol. 53(1), pages 91-110, January.
    14. Marjit, Sugata & Santra, Sattwik & Hati, Koushik Kumar, 2014. "Does inequality affect the consumption patterns of the poor? – The role of “status seeking” behaviour," MPRA Paper 54118, University Library of Munich, Germany.
    15. Kaus, Wolfhard, 2013. "Conspicuous consumption and “race”: Evidence from South Africa," Journal of Development Economics, Elsevier, vol. 100(1), pages 63-73.
    16. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-484, July.
    17. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
    18. Santra, Sattwik & Chaudhury, Ranajoy, 2015. "The American Pride and Aspiration," MPRA Paper 61649, University Library of Munich, Germany.
    19. Bagwell, Laurie Simon & Bernheim, B Douglas, 1996. "Veblen Effects in a Theory of Conspicuous Consumption," American Economic Review, American Economic Association, vol. 86(3), pages 349-373, June.
    20. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hamid Beladi & Sugata Marjit & Koushik Kumar Hati, 2024. "Growth impact of status seeking behavior: A counter example," Economics and Politics, Wiley Blackwell, vol. 36(1), pages 398-406, March.
    2. Sugata Marjit & Lei Yang, 2015. "Accumulation with Malnutrition - The Role of Status Seeking Behavior," Discussion Papers Series 544, School of Economics, University of Queensland, Australia.
    3. Marjit Sugata & Oladi Reza & Roychowdhury Punarjit, 2020. "Income Distribution and Trade Pattern," Review of Economics, De Gruyter, vol. 71(1), pages 1-14, April.
    4. Sugata Marjit & Sattwik Santra & Koushik Kumar Hati, 2018. "Status Seeking Behavior of the Poor: A Study on India," CESifo Working Paper Series 7213, CESifo.
    5. Sugata Marjit & Krishnendu Ghosh Dastidar & Abhilasha Pandey, 2023. "A Theory of Indifference Based on Status-Seeking Behaviour," CESifo Working Paper Series 10409, CESifo.
    6. Sugata Marjit & Punarjit Roychowdhury, 2015. "Inequality and Trade: A Behavioral-Economics Perspective," Discussion Papers 2015-08, University of Nottingham, GEP.
    7. Hamid Beladi & Sugata Marjit & Reza Oladi & Lei Yang, 2021. "Malnutrition in the shadow of economic growth," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 500-514, February.
    8. Jayanta Kumar Dwibedi & Sugata Marjit, 2017. "Relative Affluence and Child Labor—Explaining a Paradox," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 1178-1190, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Santra, Sattwik & Chaudhury, Ranajoy, 2015. "The American Pride and Aspiration," MPRA Paper 61649, University Library of Munich, Germany.
    2. Sugata Marjit & Lei Yang, 2015. "Accumulation with Malnutrition - The Role of Status Seeking Behavior," Discussion Papers Series 544, School of Economics, University of Queensland, Australia.
    3. Marjit, Sugata & Santra, Sattwik & Hati, Koushik Kumar, 2014. "Does inequality affect the consumption patterns of the poor? – The role of “status seeking” behaviour," MPRA Paper 54118, University Library of Munich, Germany.
    4. Sugata Marjit & Sattwik Santra & Koushik Kumar Hati, 2018. "Status Seeking Behavior of the Poor: A Study on India," CESifo Working Paper Series 7213, CESifo.
    5. Li, Linyang, 2018. "Financial inclusion and poverty: The role of relative income," China Economic Review, Elsevier, vol. 52(C), pages 165-191.
    6. Clément Bellet, 2017. "Essays on inequality, social preferences and consumer behavior [Inégalités, préférences sociales et comportement du consommateur]," SciencePo Working papers tel-03455045, HAL.
    7. repec:hal:spmain:info:hdl:2441/vbu6kd1s68o6r34k5bcm3iopv is not listed on IDEAS
    8. Clément Bellet, 2017. "Essays on Inequality, Social Preferences and Consumer Behavior," Sciences Po publications info:hdl:2441/vbu6kd1s68o, Sciences Po.
    9. Fengyu Wu, 2020. "An Examination of the Effects of Consumption Expenditures on Life Satisfaction in Australia," Journal of Happiness Studies, Springer, vol. 21(8), pages 2735-2771, December.
    10. Ravallion, Martin & Lokshin, Michael, 2010. "Who cares about relative deprivation?," Journal of Economic Behavior & Organization, Elsevier, vol. 73(2), pages 171-185, February.
    11. Di Tella, Rafael & Haisken-De New, John & MacCulloch, Robert, 2010. "Happiness adaptation to income and to status in an individual panel," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 834-852, December.
    12. Oindrila Dey & Swapnendu Banerjee, 2022. "Incentives, Status and Thereafter: A Critical Survey," South Asian Journal of Macroeconomics and Public Finance, , vol. 11(1), pages 95-115, June.
    13. Clément Bellet, 2017. "Essays on inequality, social preferences and consumer behavior [Inégalités, préférences sociales et comportement du consommateur]," SciencePo Working papers Main tel-03455045, HAL.
    14. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," PSE Working Papers halshs-00590436, HAL.
    15. Corazzini, Luca & Esposito, Lucio & Majorano, Francesca, 2011. "Exploring the absolutist vs relativist perception of poverty using a cross-country questionnaire survey," Journal of Economic Psychology, Elsevier, vol. 32(2), pages 273-283, March.
    16. Abel Brodeur & Sarah Flèche, 2019. "Neighbors' Income, Public Goods, and Well‐Being," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(2), pages 217-238, June.
    17. Hamid Beladi & Sugata Marjit & Reza Oladi & Lei Yang, 2021. "Malnutrition in the shadow of economic growth," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 500-514, February.
    18. Corazzini, Luca & Esposito, Lucio & Majorano, Francesca, 2012. "Reign in hell or serve in heaven? A cross-country journey into the relative vs absolute perceptions of wellbeing," Journal of Economic Behavior & Organization, Elsevier, vol. 81(3), pages 715-730.
    19. Tom Truyts, 2010. "Social Status In Economic Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 24(1), pages 137-169, February.
    20. KennethJ. Arrow & ParthaS. Dasgupta, 2009. "Conspicuous Consumption, Inconspicuous Leisure," Economic Journal, Royal Economic Society, vol. 119(541), pages 497-516, November.
    21. Wen-Chun Chang, 2013. "Climbing up the Social Ladders: Identity, Relative Income, and Subjective Well-being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 113(1), pages 513-535, August.

    More about this item

    Keywords

    Status; Consumption pattern; Inequality; Poverty;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:not:notgep:15/02. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hilary Hughes (email available below). General contact details of provider: https://edirc.repec.org/data/cgnotuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.