Keeping up with the Joneses: who loses out?

David Tregear Ulph

doi:10.1016/j.econlet.2014.10.029

Keeping up with the Joneses: who loses out?

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Abstract

This paper investigates how well-being varies with individual wage rates when individuals care about relative consumption and so there are Veblen effects – Keeping up with the Joneses – leading individuals to over-work. In the case where individuals compare themselves with their peers – those with the same wage-rate - it is shown that Keeping up with the Joneses leads some individuals to work who otherwise would have chosen not to. Moreover for these individuals well-being is a decreasing function of the wage rate - contrary to standard theory. So those who are worst-off in society are no longer those on the lowest wage.

Original language	English
Pages (from-to)	400-403
Number of pages	10
Journal	Economics Letters
Volume	125
Issue number	3
Early online date	31 Oct 2014
DOIs	https://doi.org/10.1016/j.econlet.2014.10.029
Publication status	Published - Dec 2014

Keywords

Veblen Effects;
Consumer choice
Nash equilibrium
wages and well-being

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10.1016/j.econlet.2014.10.029

Ulph2014EconomicsLetters125-3-Keeping400-403
©2014 The Author. Published by Elsevier B.V. This is an open access article under the CCBY license (http://creativecommons.org/licenses/by/3.0/).
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Keeping up with the Joneses: who loses out?

Abstract

Keywords

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