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Choosing or Inheriting the Joneses: The Origins of Reference Groups

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  • Leites, Martin

    (Universidad de la República, Uruguay)

  • Paleo, Camila

    (IECON, Universidad de la República)

  • Ramos, Xavier

    (Universitat Autònoma de Barcelona)

  • Salas, Gonzalo

    (IECON, Universidad de la República)

Abstract

Do individuals choose their reference groups, i.e. their Joneses, or are they culturally transmitted across generations? We provide evidence that feeds the theoretical debate about the endogeneity or exogeneity of reference groups. Our findings for Uruguay suggest that reference groups are largely transmitted across generations. We also find individuals to have multiple reference groups and these to be context-specific. Our results are robust to several checks and to endogeneity issues.

Suggested Citation

  • Leites, Martin & Paleo, Camila & Ramos, Xavier & Salas, Gonzalo, 2022. "Choosing or Inheriting the Joneses: The Origins of Reference Groups," IZA Discussion Papers 15584, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15584
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    More about this item

    Keywords

    intergenerational transmission; reference group; income comparisons;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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