Status, happiness, and relative income
By: by John Beath, Felix FitzRoy.
Contributors: FitzRoy, Felix.
Series: Discussion paper -- no. 2658; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) -- no. 2658
Publisher: IZA
Published: 2007
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Social status.; Consumption (Economics); Income.
Description: "Models of status based on Frank's (1985) count of the number of people with lower conspicuous consumption are inconsistent with the extensive empirical literature on happiness and well-being. The alternative approach to consumption interaction which uses some form of relative income has been developed in various contexts. These predict that a representative agent's well-being will increase with real income or consumption. However, this is again inconsistent with the time-series evidence for advanced economies. In this paper we combine a simple model of relative income with a distribution of ability that correctly predicts both time series results of near constant utility, and the positive, concave cross-sectional relation between income, working time and happiness"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Title from PDF file as viewed on 6/18/2007.

Includes bibliographical references.

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