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Does Envy Destroy Social Fundamentals? The Impact Of Relative Income Position On Social Capital

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Justina A.V. Fischer
Benno Torgler

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Abstract

Research evidence on the impact of relative income position on individual attitudes and behaviour is sorely lacking. Therefore, this paper assesses such positional impact on social capital by applying 14 different measurements to International Social Survey Programme data from 25 countries. We find support for a positional concern effect or 'envy' whose magnitude in several cases is quite substantial. The results indicate that such an effect is non-linear. In addition, we find an indication that absolute income level is also relevant. Lastly, changing the reference group (regional versus national) produces no significant differences in the results.

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Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Development Economics Papers with number 46.

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Date of creation: Feb 2006
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Handle: RePEc:cep:stidep:46

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Keywords: Relative income position; envy; positional concerns; social capital; social norms; happiness;

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Find related papers by JEL classification:
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology
H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
D00 - Microeconomics - - General - - - General
D60 - Microeconomics - - Welfare Economics - - - General

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