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Do Positional Concerns Destroy Social Capital: Evidence from 26 Countries

  • Justina A V Fischer

    ()

    (University of Mannheim)

  • Benno Torgler

    ()

    (QUT)

Research on the effects of positional concerns on individuals’ attitudes and behavior is sorely lacking. To address this deficiency, we use the International Social Survey Programme 1998 data on 25’000 individuals from 26 countries to investigate the impact of relative income position on three facets of social capital, covering horizontal and vertical trust as well as norm compliance. Testing relative deprivation theory, we identify a deleterious positional income effect for persons below the reference income, particularly for their social trust and confidence in secular institutions. Also often a social capital-lowering effect of relative income advantage occurs, while a rise in absolute income almost always contributes positively. These results indicate that a rise in income inequality in society too large is rather detrimental to the formation of social capital.

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File URL: http://external-apps.qut.edu.au/business/documents/discussionPapers/2011/WP265.pdf
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Paper provided by School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 265.

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Length: 52 pages
Date of creation: 17 Feb 2011
Date of revision:
Handle: RePEc:qut:dpaper:265
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Web page: http://www.bus.qut.edu.au/faculty/economics/
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