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Migration when social preferences are ordinal: Steady-state population distribution, and social welfare

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  • Stark, Oded

Abstract

This paper adds three dimensions to the received literature: it models migration when the individuals' preferences regarding their relative income are ordinal, it works out the resulting spatial steady-state distribution of the individuals, and it shows that the aggregate of the individuals' migration choices in the spatial steady-state distribution sums up to the social optimum. This finding does not apply when the individuals' preferences regarding their relative income are cardinal. We highlight the importance of the assumption about the nature of the individuals' social preferences (whether ordinal or cardinal) to studying and predicting their migration behavior, and to elucidating the consequences of that behavior for social welfare.

Suggested Citation

  • Stark, Oded, 2017. "Migration when social preferences are ordinal: Steady-state population distribution, and social welfare," University of Tübingen Working Papers in Business and Economics 98, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
  • Handle: RePEc:zbw:tuewef:98
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    References listed on IDEAS

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    1. Azmat, Ghazala & Iriberri, Nagore, 2010. "The importance of relative performance feedback information: Evidence from a natural experiment using high school students," Journal of Public Economics, Elsevier, vol. 94(7-8), pages 435-452, August.
    2. Stark, Oded & Fan, C. Simon, 2011. "Migration for degrading work as an escape from humiliation," Journal of Economic Behavior & Organization, Elsevier, vol. 77(3), pages 241-247, March.
    3. Czaika, Mathias, 2011. "Internal and international migration as response of double deprivation: some evidence from India," Proceedings of the German Development Economics Conference, Berlin 2011 21, Verein für Socialpolitik, Research Committee Development Economics.
    4. Bilancini, Ennio & Boncinelli, Leonardo, 2008. "Ordinal vs cardinal status: Two examples," Economics Letters, Elsevier, vol. 101(1), pages 17-19, October.
    5. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 963-1002.
    6. Oded Stark & Walter Hyll & Yong Wang, 2012. "Endogenous Selection of Comparison Groups, Human Capital Formation, and Tax Policy," Economica, London School of Economics and Political Science, vol. 79(313), pages 62-75, January.
    7. Blanchflower, David G. & Oswald, Andrew J., 2008. "Hypertension and happiness across nations," Journal of Health Economics, Elsevier, vol. 27(2), pages 218-233, March.
    8. David Andolfatto, 2002. "A Theory of Inalienable Property Rights," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 382-393, April.
    9. C. Simon Fan & Oded Stark, 2011. "A Theory Of Migration As A Response To Occupational Stigma," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 549-571, May.
    10. Susanne Neckermann & Bruno S. Frey, 2008. "Awards as Incentives," IEW - Working Papers 334, Institute for Empirical Research in Economics - University of Zurich.
    11. Stark, Oded, 2013. "Stressful Integration," European Economic Review, Elsevier, vol. 63(C), pages 1-9.
    12. David Card & Alexandre Mas & Enrico Moretti & Emmanuel Saez, 2012. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction," American Economic Review, American Economic Association, vol. 102(6), pages 2981-3003, October.
    13. Alain Cohn & Ernst Fehr & Benedikt Herrmann & Frédéric Schneider, 2014. "Social Comparison And Effort Provision: Evidence From A Field Experiment," Journal of the European Economic Association, European Economic Association, vol. 12(4), pages 877-898, August.
    14. Michael Kosfeld & Susanne Neckermann, 2011. "Getting More Work for Nothing? Symbolic Awards and Worker Performance," American Economic Journal: Microeconomics, American Economic Association, vol. 3(3), pages 86-99, August.
    15. Duffy, John & Kornienko, Tatiana, 2010. "Does competition affect giving?," Journal of Economic Behavior & Organization, Elsevier, vol. 74(1-2), pages 82-103, May.
    16. Daniel J. Zizzo & Andrew J. Oswald, 2001. "Are People Willing to Pay to Reduce Others'Incomes?," Annals of Economics and Statistics, GENES, issue 63-64, pages 39-65.
    17. Frey, Bruno S & Stutzer, Alois, 2000. "Happiness, Economy and Institutions," Economic Journal, Royal Economic Society, vol. 110(466), pages 918-938, October.
    18. repec:adr:anecst:y:2001:i:63-64 is not listed on IDEAS
    19. Oded Stark & Walter Hyll, 2011. "On the Economic Architecture of the Workplace: Repercussions of Social Comparisons among Heterogeneous Workers," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 349-375.
    20. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, vol. 101(408), pages 1163-1178, September.
    21. repec:adr:anecst:y:2001:i:63-64:p:03 is not listed on IDEAS
    22. Michael A. Quinn, 2006. "Relative Deprivation, Wage Differentials and Mexican Migration," Review of Development Economics, Wiley Blackwell, vol. 10(1), pages 135-153, February.
    23. Kuhnen, Camelia M. & Tymula, Agnieszka, 2008. "Rank expectations, feedback and social hierarchies," MPRA Paper 13428, University Library of Munich, Germany, revised Jan 2009.
    24. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, vol. 101(408), pages 1163-1178, September.
    25. Fliessbach, Klaus & Weber, Bernd & Trautner, P. & Dohmen, Thomas J. & Sunde, Uwe & Elger, C. E. & Falk, Armin, 2007. "Social comparison affects reward-related brain activity in the human ventral striatum," Munich Reprints in Economics 20362, University of Munich, Department of Economics.
    26. Hyll, Walter & Schneider, Lutz, 2014. "Relative deprivation and migration preferences," Economics Letters, Elsevier, vol. 122(2), pages 334-337.
    27. Stark, Oded & Micevska, Maja & Mycielski, Jerzy, 2009. "Relative poverty as a determinant of migration: Evidence from Poland," Economics Letters, Elsevier, vol. 103(3), pages 119-122, June.
    28. Nattavudh Powdthavee, 2009. "How important is rank to individual perception of economic standing? A within-community analysis," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(3), pages 225-248, September.
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    Citations

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    Cited by:

    1. Oded STARK & Wiktor Budzinski, 2019. "Repercussions of Negatively Selective Migration for the Behavior of Non-Migrants when Preferences Are Social," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 85(2), pages 165-179, June.
    2. Bilancini, Ennio & Boncinelli, Leonardo, 2019. "Wage inequality, labor income taxes, and the notion of social status," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-35.
    3. Ruxanda Berlinschi & Jan Fidrmuc, 2018. "Comfort and Conformity: A Culture-based Theory of Migration," LICOS Discussion Papers 40518, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    4. Stefan Jestl & Mathias Moser & Anna Katharina Raggl, 2017. "Can’t Keep Up with the Joneses: How Relative Deprivation Pushes Internal Migration in Austria," wiiw Working Papers 137, The Vienna Institute for International Economic Studies, wiiw.

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    More about this item

    Keywords

    Ordinal preferences; Distaste for low relative income; An ordinal measure of income relative deprivation; Interregional migration; Steady-state spatial distribution; Social Welfare;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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