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Social capital and relative income concerns: evidence from 26 countries

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  • Justina A.V. Fischer

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  • Benno Torgler

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Abstract

Research evidence on the impact of relative income position on individuals’ attitudes and behaviour is sorely lacking. Therefore, using the International Social Survey Programme 1998 data from 26 countries this paper investigates the impact of relative income on 14 measurements of social capital. We find support for a considerable deleterious positional concern effect of persons below the reference income. This effect is more sizeable by far than the beneficial impact of a relative income advantage. Most of the results indicate that such an effect is non-linear. Lastly, changing the reference group (regional versus national) produces no significant differences in the results.

Suggested Citation

  • Justina A.V. Fischer & Benno Torgler, 2007. "Social capital and relative income concerns: evidence from 26 countries," University of St. Gallen Department of Economics working paper series 2007 2007-05, Department of Economics, University of St. Gallen.
  • Handle: RePEc:usg:dp2007:2007-05
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    Cited by:

    1. Markus Schaffner & Benno Torgler, 2008. "Meet the Joneses: An Empirical Investigation of Reference Groups in Relative Income Position Comparisons," School of Economics and Finance Discussion Papers and Working Papers Series 234, School of Economics and Finance, Queensland University of Technology, revised 17 Jun 2008.
    2. Fischer, Justina AV, 2008. "The Welfare Effects of Social Mobility," MPRA Paper 16339, University Library of Munich, Germany, revised Jun 2009.
    3. D'Angelo, Emanuela & Lilla, Marco, 2007. "Is there more than one linkage between Social Network and Inequality?," IRISS Working Paper Series 2007-12, IRISS at CEPS/INSTEAD.
    4. Fischer, Justina AV, 2008. "Competition and well-being: does market competition make people unhappy?," SSE/EFI Working Paper Series in Economics and Finance 697, Stockholm School of Economics.
    5. Pugno, Maurizio, 2009. "The Easterlin paradox and the decline of social capital: An integrated explanation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(4), pages 590-600, August.
    6. Fischer, Justina AV, 2009. "The Welfare Effects of Social Mobility: An Analysis for OECD countries," MPRA Paper 17070, University Library of Munich, Germany.

    More about this item

    Keywords

    Relative income; positional concerns; social capital; social norms; happiness;

    JEL classification:

    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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