Are Positional Concerns Stronger in Some Domains than in Others?

Bibliographic Data

ID23320140
AuthorsSara J Solnick (0000-0002-3172-1041, University of Vermont), David Hemenway (0000-0002-8125-1690, Harvard School of Public Health)
Year2005
Volume95
Issue2
Pages147-151
Publication date2005-04-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueAmerican Economic Review (JOURNAL)
Journal identifiersISSN: 0002-8282 • E-ISSN: 1944-7981
PublisherAmerican Economic Association (PUBLISHER • US)
DOI10.1257/000282805774669925
OpenAlexW2110886104
LanguageEN
Citations received59
References cited10

For more than one hundred years, economists have discussed the concept of positional goods—that the utility conferred by many, perhaps even most, goods depends not only on the amount the individual consumes, but also on the amount others consume (e.g., Thorstein Veblen, 1899; James Duesenberry, 1949; John K. Galbraith, 1958; Robert Frank, 1985). While economic interest in “positional goods” is increasing (e.g., Mark Pingle and Mike Mitchell, 2002; Kenneth Arrow et al., 2004; Ed Hopkins and Tatiana Kornienko, 2004), the literature remains largely theoretical rather than empirical. If status concerns affect all items in the utility function equally (leisure as well as goods), the positional effect would operate like a lump-sum tax, reducing well-being without changing the allocation of time or money (Arrow et al., 2004). However, if positional concerns are stronger for some things than for others, then in order to understand how people can become better off in well-being, not simply in wealth, we must investigate how interpersonal competition interacts with material gains (Frank, 1997). Evidence about what goods are more positional than others is essential for correct policy recommendations (Gregory Besharov, 2002), but little is actually known about the relative positional rankings of items in the typical consumer’s utility function. Four hypotheses proposed in the literature are

Arrow · Competition (biology) · Economics · Function (biology) · Microeconomics · Neoclassical economics · Order (exchange) · Positive economics · Veblen good · Decision-Making and Behavioral Economics · Economic Theory and Institutions · Experimental Behavioral Economics Studies

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