Social Norms, Savings Behavior, and Growth

Cole, Harold L.; Mailath, George J.; Postlewaite, Andrew

doi:10.1086/261855

Cited by 519 publications

(475 citation statements)

References 14 publications

Supporting

Mentioning

427

Contrasting

Unclassified

Order By: Relevance

“…For example, Robson [120] considers how a concern for status and an attendant riskpreference might arise in a polygynous setting, where females choose males based on their wealth. Cole, Mailath and Postlewaite [26] suggest that concerns for status may arise because some goods in our economy are allocated not by prices, but by nonmarket mechanisms in which status plays a role. Cole, Mailath and Postlewaite suggest the "marriage market" as a prime such example, where access to desirable mates often hinges on placing well in a status ordering that depends importantly on wealth.…”

Section: Risk and Statusmentioning

confidence: 99%

The Evolutionary Foundations of Preferences

Robson

Samuelson

2011

Handbook of Social Economics

100

View full text Add to dashboard Cite

Abstract. This paper, prepared for the forthcoming The Social Economics Handbook (Jess Benhabib, Alberto Bisin and Matthew Jackson, editors, Elsevier Press), surveys recent work on the evolutionary origins of preferences. We are especially interested in the circumstances under which evolution would push preferences away from the self-interested perfectly-rational expected utility maximization of classical economic theory in order to incorporate environmental or social considerations. * We thank Andrew Postlewaite for helpful discussions and comments.

show abstract

Section: Risk and Statusmentioning

confidence: 99%

The Evolutionary Foundations of Preferences

Robson

Samuelson

2011

Handbook of Social Economics

100

View full text Add to dashboard Cite

show abstract

“…These studies find that, in addition to their own levels of consumption, individuals care about their peers' consumption levels and their wealth rank relative to their comparison group, which validates the use of reduced-form models such as equation 1. For instance, see Cole et al (1992); Corneo and Jeanne (1997);. Boskin and Sheshinski (1978) and Oswald (1983) theoretically analyze tax policy implications of relative utility, while Abel (1990); Bakshi and Chen (1996); Gali (1994);and Campbell and Cochrane (1999) examined such relative effects on asset pricing.…”

Section: Data Descriptionmentioning

confidence: 99%

The Relative Utility Hypothesis With and Without Self-Reported Reference Wages

et al. 2010

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis article uses survey data of 90,000 union employees working in 62 publicly-traded companies in Japan between 1990 and 2004 to study the effect of both own and self-reported reference wages on workers' subjective well-being levels. The availability of self-reported reference wages generates very robust findings that do not depend on questionable identifying assumptions. These findings confirm that higher estimates by workers of their peers' earnings are associated with lower levels of life and job satisfaction. These comparison effects are statistically and economically strong but are smaller in absolute value than the impact of workers' own wages on their own utility. We compare our results with standard tests of the relative utility hypothesis in the literature that recur to alternative proxies for comparison wages, including: (i) Mincer-predicted wages; (ii) cell averages defined over different groups within our dataset; (iii) cell wage averages estimated from an external data source; and (iv) colleagues' average wages. In spite of their potential flaws-that we discuss-these alternative empirical constructs employed in the literature do not introduce a simple classical measurement error problem and the bias attributed to this measurement error issue can go in both directions. We propose a simple IV strategy when the self-reported reference wage is not available that does not eliminate the bias but delivers a lower bound of the "true" effect. We also address the issue of endogeneity of self-reported reference wages in our subjective well-being regressions by accounting for workers' pessimistic attitudes at the workplace.

show abstract

“…Indeed, our formulation does not even require the knowledge of precisely what this individual 7 As noted earlier, the appeal of``doing better than others'' may even be a direct consequence of the primitives of an economic model. One such example is provided by Cole et al (1992) within the context of a matching model where (independent) utility maximization leads to the desire of having a better standing (in terms of relative wealth) in the society than others. regards as``status''; this information is implicit in the agent's preference relation x.…”

Section: Negative Interdependence and Spitementioning

confidence: 99%

“…' Veblen (1899, p. 32)1 This basic insight has later been reformulated in several distinct ways to capture the notion that one's well-being is determined not only by the intrinsic utility of her material consumption, but also by one's relative standing (status) in the society or in her peer group (Duesenberry 1949, Easterlin 1974, Layard 1980, Frank 1985.2 In the economics literature, this notion is sometimes referred to as the relative income hypothesis, or as the phenomenon of keeping up with the Joneses, and is usually introduced to the models by postulating envious preferences on the part of the individuals. Furthermore, it is noted by several authors that, in some cases, the individuals may care about their relative standing in the society simply because a higher status implies better access to goods which the individuals value (Cole et al 1992).…”

Section: Introductionmentioning

confidence: 99%

Negatively interdependent preferences

Ok¹,

Koçkesen²

2000

Social Choice and Welfare

View full text Add to dashboard Cite

Abstract. We develop a theory of representation of interdependent preferences that re¯ect the widely acknowledged phenomenon of keeping up with the Joneses (i.e. of those preferences which maintain that well-being depend oǹ`r elative standing'' in the society as well as on material consumption). The principal ingredient of our analysis is the assumption that individuals desire to occupy a (subjectively) better position than their peers. This is quite a primitive starting point in that it does not give any reference to what is actually regarded as``status'' in the society. We call this basic postulate negative interdependence, and study its implications. In particular, combining this assumption with some other basic postulates that are widely used in a number of other branches of the theory of individual choice, we axiomatize the relative income hypothesis, and obtain an operational representation of interdependent preferences.

show abstract

Social Norms, Savings Behavior, and Growth

Cited by 519 publications

References 14 publications

The Evolutionary Foundations of Preferences

The Evolutionary Foundations of Preferences

The Relative Utility Hypothesis With and Without Self-Reported Reference Wages

Negatively interdependent preferences

Contact Info

Product

Resources

About