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What makes us want to have more than others? Explaining relative consumption effects of public and private goods

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  • Hillesheim, Inga
  • Mechtel, Mario

Abstract

We conduct a survey with 264 participants to test for relative consumption effects of national and local public goods as well as private goods. In contrast to previous results, we find that relative consumption effects are more pronounced for private goods than for public goods. Our second finding is that relative consumption effects are less pronounced for local public goods than for national public goods. We discuss and test different explanations for a good's degree of positionality and find that these can, in part, account for our results very well.

Suggested Citation

  • Hillesheim, Inga & Mechtel, Mario, 2011. "What makes us want to have more than others? Explaining relative consumption effects of public and private goods," University of Tübingen Working Papers in Business and Economics 4, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    • Handle: RePEc:zbw:tuewef:4
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    References listed on IDEAS

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    Cited by:

    1. Inga Hillesheim & Mario Mechtel, 2012. "Relative Consumption Concerns or Non-Monotonic Preferences?," IAAEU Discussion Papers 201201, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    2. Hillesheim, Inga & Mechtel, Mario, 2013. "How much do others matter? Explaining positional concerns for different goods and personal characteristics," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 61-77.
    3. Inga Hillesheim, 2012. "Relative consumption and majority voting: supplementing Oates’ “Decentralization Theorem”," Journal of Economics, Springer, vol. 105(1), pages 29-43, January.
    4. Mageli, Ingvild & Mannberg, Andrea & Heen, Eirik Eriksen, 2022. "With whom, and about what, do we compete for social status? Effects of social closeness and relevance of reference groups for positional concerns," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 98(C).

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    More about this item

    Keywords

    Relative consumption; Positional goods; Public good spillovers; Non-psychological costs;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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