A Curse of Comparison? Evidence on Reference Groups for Relative Income Concerns

• Tác giả: Alice Kuegler
• Ngôn ngữ: eng
• Ký hiệu phân loại: 339.22 Distribution of aggregate personal income and wealth
• Thông tin xuất bản: 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 242812
• Chủ đề: 1. ACCOUNTING; 2. ADEQUATE INCOME; 3. AGGREGATE DEMAND; 4. ASYMMETRIC INFORMATION; 5. AVERAGE INCOME

Tóm tắt

This paper proposes that individuals care about the relative income of proximate reference groups. Making use of self-reported life satisfaction as a proxy for unobservable utility, the relative income of siblings is tested for relevance as a reference point for new sample data from Venezuela. Having greater perceived income than one's siblings is found to be positively linked to individual life satisfaction. This evidence supplements the scarce economic research on reference groups, supporting the hypothesis that individuals with proximate characteristics and resembling opportunities in life serve as points of comparison.