Neighbors as negatives
Subtitle: relative earnings and well-being
By: Erzo F.P. Luttmer.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10667; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10667.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Social values -- United States.; Envy -- Economic aspects.; Social status -- United States.
Description: "This paper investigates whether individuals feel worse off when others around them earn more.  In other words, do people care about relative position and does lagging behind the Joneses' diminish well-being? To answer this question, I match individual-level panel data containing a number of indicators of well-being to information about local average earnings.  I find that, controlling for an individual's own income, higher earnings of neighbors are associated with lower levels of self-reported happiness.  The data's panel nature and rich set of measures of well-being and behavior indicate that this association is not driven by selection or by changes in the way people define happiness.  There is suggestive evidence that the negative effect of increases in neighbors' earnings on own well-being is most likely caused by interpersonal preferences people having utility functions that depend on relative consumption in addition to absolute consumption"--National Bureau of Economic Research web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 1/11/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.