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Keeping Up with the Vaishyas: Caste and Relative Standing

Author

Listed:
  • Carlsson, Fredrik

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

  • Gupta, Gautam

    (Department of Economics, Jadavpur University)

  • Johansson-Stenman, Olof

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

Abstract

We investigate the importance of relative income within the Indian Caste system, using a choice experiment. We find that slightly more than half of the marginal utility of income comes from some kind of relative income effects, on average, which is comparable to the results from previous studies in other countries. Belonging to a low caste and having a low family income are associated with higher concern for relative income. Moreover, an increase in the mean income of the caste to which the individual belongs, everything else held constant, reduces utility for the individual. Thus, the negative welfare effect of reduced relative income compared to the average own caste income dominates the positive welfare effect of increased relative income of the own caste relative to other castes.

Suggested Citation

  • Carlsson, Fredrik & Gupta, Gautam & Johansson-Stenman, Olof, 2005. "Keeping Up with the Vaishyas: Caste and Relative Standing," Working Papers in Economics 171, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0171
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    File URL: http://hdl.handle.net/2077/2748
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    Cited by:

    1. Arthur Lewbel & Samuel Norris & Krishna Pendakur & Xi Qu, 2022. "Consumption peer effects and utility needs in India," Quantitative Economics, Econometric Society, vol. 13(3), pages 1257-1295, July.
    2. Lora, Eduardo & Chaparro, Juan Camilo, 2008. "The Conflictive Relationship between Satisfaction and Income," IDB Publications (Working Papers) 1633, Inter-American Development Bank.

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    More about this item

    Keywords

    Caste; India; relative income; positionality; status; questionnaire-experimental methods; random utility models; choice experiments;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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