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The Concept Of Comparison Income: An Historical Perspective

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  • Drakopoulos, Stavros A.

Abstract

Theories of social comparison have a long presence in the social sciences and have provided many useful insights. In economics, the idea of comparison, aspiration or relative income belongs to this theoretical framework. The first systematic usages of this idea can be found in the works of Keynes and Duesenberry. After these works the concept was relatively ignored by orthodox theorists until its recent re-appearance mainly in the fields of labour and macroeconomics. To the contrary, however, income comparisons continued to play a role in much of Keynesian inspired and Behavioural economics literature. In the last few years it has made a strong comeback in the literature of job satisfaction and of the economics of happiness. This paper attempts to trace the development of the concept in the modern history of economic thought. It also discusses the main theoretical implications of adopting income comparisons and possible reasons for its relative disregard by orthodox economics.

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  • Drakopoulos, Stavros A., 2008. "The Concept Of Comparison Income: An Historical Perspective," MPRA Paper 8713, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8713
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    Cited by:

    1. Drakopoulos, Stavros A. & Grimani, Katerina, 2013. "Maslow’s Needs Hierarchy and the Effect of Income on Happiness Levels," MPRA Paper 50987, University Library of Munich, Germany.
    2. Drakopoulos, Stavros, 2011. "Hierarchical Needs, Income Comparisons and Happiness Levels," MPRA Paper 48343, University Library of Munich, Germany.
    3. Temesgen Kifle, 2014. "Do Comparison Wages Play a Major Role in Determining Overall Job Satisfaction? Evidence from Australia," Journal of Happiness Studies, Springer, vol. 15(3), pages 613-638, June.
    4. Drakopoulos, Stavros A., 2010. "The history of the mainstream rejection of interdependent preferences," MPRA Paper 23980, University Library of Munich, Germany.

    More about this item

    Keywords

    Relative Income; History of Economic Thought; Wages;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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