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Social status pursuit, distribution of bequests and inequality

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  • Camacho, Carmen
  • Harmankaya, Fatih
  • Sağlam, Çağrı

Abstract

The quest for social status modifies lifetime decisions and as a consequence, the trajectory of the overall economy. Focusing on the relative wealth dimension of social status, we build a two-period overlapping generations model with heterogeneous agents to investigate the effects of status quest on the evolution of bequest distribution and household inequality. We show that the bequest motive and the concern for social status not only increase the stationary level of capital but also enhance the household equality.

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  • Camacho, Carmen & Harmankaya, Fatih & Sağlam, Çağrı, 2020. "Social status pursuit, distribution of bequests and inequality," Economic Modelling, Elsevier, vol. 86(C), pages 183-191.
    • Handle: RePEc:eee:ecmode:v:86:y:2020:i:c:p:183-191
    DOI: 10.1016/j.econmod.2019.06.010
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    1. Caballé, Jordi & Moro-Egido, Ana I., 2021. "Do aspirations reduce differences in wealth accumulation?," Economic Modelling, Elsevier, vol. 102(C).

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    More about this item

    Keywords

    Reference dependent utility; Bequests; Social status; Household inequality;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy

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