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Social Capital and Relative Income Concerns: Evidence from 26 Countries

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Author Info
Justina Fischer
Benno Torgler

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Abstract

Research on the effects of positional concerns on individuals’ attitudes and behaviour is sorely lacking. Therefore, using the International Social Survey Programme 1998 data on 25’000 individuals from 26 countries this paper investigates the impact of relative income position on facets of social capital, covering horizontal and vertical trust as well as norm compliance. Testing relative deprivation theory, we identify a deleterious positional income effect for persons below the reference income, the absolute size of which far outweighs that of relative income advantage. In contrast, social capital rises in absolute income, while distributional fairness perceptions partially mediate relative income effects.

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File URL: http://www.twi-kreuzlingen.ch/typo3/uploads/tx_cal/media/TWI-RPS-038-Fischer-Torgler-2008-10.pdf
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Paper provided by Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 38.

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Date of creation: 2008
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Handle: RePEc:twi:respas:0038

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Related research
Keywords: Relative income; positional concerns; social capital; social norms; deprivation theory;

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This paper has been announced in the following NEP Reports: Cited by:
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  1. Fischer, Justina AV, 2008. "Competition and well-being: does market competition make people unhappy?," Working Paper Series in Economics and Finance 697, Stockholm School of Economics. [Downloadable!]
  2. D'Angelo, Emanuela & Lilla, Marco, 2007. "Is there more than one linkage between Social Network and Inequality?," IRISS Working Paper Series 2007-12, IRISS at CEPS/INSTEAD. [Downloadable!]
  3. Markus Schaffner & Benno Torgler, 2008. "Meet the Joneses: An Empirical Investigation of Reference Groups in Relative Income Position Comparisons," School of Economics and Finance Discussion Papers and Working Papers Series 234, School of Economics and Finance, Queensland University of Technology, revised 17 Jun 2008. [Downloadable!]
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