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Journal article
Choosing to keep up with the Joneses and income inequality
Economic theory, v 45(3), pp 469-496
01 Dec 2010
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
We study a variant of the conventional keeping-up-with-the-Joneses setup, in which heterogeneous-ability agents care both about consumption and leisure and receive an utility premium if their consumption exceeds that of the Joneses'. Unlike the conventional setup in which all agents are assumed to want to participate in the rat race of staying ahead of the Joneses, our formulation explicitly permits the option to drop out. Mean-preserving changes in the spread of the underlying ability distribution, via its effect on the economy-wide composition of rat-race participants and drop-outs, have important consequences for induced distributions of leisure and income, consequences that are unobtainable using conventional keeping-up preferences.
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Details
- Title
- Choosing to keep up with the Joneses and income inequality
- Creators
- Richard C. Barnett - Villanova UniversityJoydeep Bhattacharya - Iowa State UniversityHelle Bunzel - Iowa State University
- Publication Details
- Economic theory, v 45(3), pp 469-496
- Publisher
- Springer Nature
- Number of pages
- 28
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics); Bennett S. LeBow College of Business; Drexel University
- Web of Science ID
- WOS:000283114500004
- Scopus ID
- 2-s2.0-77958505547
- Other Identifier
- 991019551545104721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Economics