Looking up and down and round and round
A Theoretical-Empirical, Individual-Level Analysis of Income Comparisons
Bibliographic Data
| ID | 4237282 |
|---|---|
| Authors | Alex Lehr (0000-0002-0136-9737, Radboud University Nijmegen, corresponding author) |
| Year | 2024 |
| Volume | 22 |
| Issue | 2 |
| Pages | 501-532 |
| Publication date | 2024-06-20 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Socio-Economic Review (JOURNAL) |
| Journal identifiers | ISSN: 1475-1461 • E-ISSN: 1475-147X |
| DOI | 10.1093/ser/mwad054 |
| OpenAlex | W4387327436 |
| Language | EN |
| Citations received | 1 |
| References cited | 52 |
Income comparisons imply that individuals care not only about the absolute value of their income but also about its relative value. Such comparisons likely have significant societal consequences while also challenging standard neoclassical economic theory. I argue that a better understanding of income comparisons requires a more systematic, theoretical engagement with three problems: (1) the problem of reference group selection, (2) the problem of orientation, and (3) the problem of functional form. Income comparisons are commonly attributed to interdependent preferences, in particular to envy. I propose an alternative theoretical approach in which comparisons are a rational means for individuals to improve upon imperfect information about their current earning potential. I test the empirical implications of both approaches for reference group selection, orientation, and functional form using individual-level data from the Netherlands. The evidence suggests that imperfect information drives comparisons, but interdependent preferences also play a role
Econometrics · Economics · Empirical research · Imperfect · Interdependence · Microeconomics · Orientation (vector space · Perfect information · Positive economics · Public economics · Selection (genetic algorithm · Social science · Sociology · Statistics · Value (mathematics · Computer Science · Decision-Making and Behavioral Economics · Income, Poverty, and Inequality · Mathematics · Psychological Well-being and Life Satisfaction
Does inequality cause conflict?
Inequality at Work
When information dominates comparison
“Last-Place Aversion”
Happiness adaptation to income and to status in an individual panel
Individual welfare, majority voting, and the properties of a linear income tax
Income and well-being
Prospect Theory
Will raising the incomes of all increase the happiness of all?
The Theory Of The Leisure Class
Direct Evidence on Income Comparisons and Their Welfare Effects
The Relational Generation of Workplace Inequalities
Inequality, happiness and relative concerns
How Much Does Your Boss Make? The Effects of Salary Comparisons
A Rational Theory of the Size of Government
Job Satisfaction and Co‐worker Wages
Why Social Preferences Matter – the Impact of non‐Selfish Motives on Competition, Cooperation and Incentives
Income, Saving, and the Theory of Consumer Behaviour
Who Compares to Whom? The Anatomy of Income Comparisons in Europe
A Theory of Social Comparison Processes
Social utility and decision making in interpersonal contexts
A Theory of Fairness, Competition, and Cooperation
The Changing Tolerance for Income Inequality in the Course of Economic Development
Toward a Theory of Revolution
A Position with a View
What do Germans think and know about income inequality? A survey experiment
Value fluidity and value anchoring
Understanding inequality through the lens of cultural processes
Economic inequality and public demand for redistribution
Inequality, public opinion and redistribution
What is missing? Cultural processes and causal pathways to inequality
Inequality as Relative Deprivation
Construction, Concentration, and (Dis)Continuities in Social Valuations
Needs, Comparisons, and Adaptation
Self-Correcting Dynamics in Social Influence Processes
Forms of uncertainty reduction
| Unique citing works | 1 |
|---|---|
| Citations per year | 1 |
| Citation span | 2026 - 2026 (1) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 1 |