Status-seeking, income taxation and efficiency

Ireland, Norman J.

doi:10.1016/s0047-2727(98)00062-0

Cited by 81 publications

(63 citation statements)

References 11 publications

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“…Men face a trade-o¤ between investing in their survival, and conspicuous consumption that signals their quality and thus increases their matching probability. Much of the theory emphasizes the role of status goods as signals of income (Bagwell and Bernheim 1996;Corneo and Jeanne 1997;Frank 1985Frank , 1986Ireland 1994Ireland , 1998Ireland , 2001; Glazer and Konrad 1996; Moav and Neeman 2012) often with consideration of the role of the income of potential grooms in the context of marriage matching. 3 Men may incur debt to provide a dishonest signal of their desirability as a mate (Gallup and Frederick 2010).…”

Section: Introductionmentioning

confidence: 99%

Old money, the nouveaux riches and Brunhilde’s marriage strategy

2016

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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. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 8307 July 2014 ABSTRACTOld Money, the Nouveaux Riches and Brunhilde's Marriage Strategy *

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Section: Introductionmentioning

confidence: 99%

Old money, the nouveaux riches and Brunhilde’s marriage strategy

2016

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“…This is a usual result in the literature (e.g. Ireland, 1994Ireland, , 1998Ireland, , 2001, except that in our model it arises with endogenous relative concerns. Looking at how changes with is not very informative about the after-tax distribution of incomes, since e¤orts (and then output) respond to .…”

Section: 4mentioning

confidence: 60%

“…$1000-$1999, $2000-$2999), donations within each category are very close to the lower bound. 52 Anther piece of evidence comes from Mandel (2009), who shows that long-term average returns for art are lower than for equity and, in several cases, the mean real return of "risk-free" government bonds. Art is particularly observable: it gives a practical excuse to let your friends know about your expenditures.…”

Section: Extensions and Empirical Testsmentioning

confidence: 99%

Conspicuous Consumption in the Land of Prince Charming

Truglia¹

2010

SSRN Journal

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Abstract. Conspicuous consumption is a signaling device used to allocate non-market goods (i.e. goods that cannot be traded in markets). In sharp contrast to the existing literature, in our model people do not want to signal wealth but some unobservable traits that, conditional on other observable information, are correlated with wealth. For instance, in order to get non-markets goods like respect, esteem and admiration, people want to signal the talents that generated the wealth, and not the wealth itself. Both the nature of the equilibrium and the policy implications depart dramatically from the literature. More and more papers argue that, because of relative concerns, the government should redistribute heavily. Our model shows that, once taken in a general-equilibrium context, those arguments break down. Furthermore, our model o¤ers explanations beyond the current reach of the literature, like a theory of the natural rate of inequality.

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“…15 We assume that each new entrant to high society inflicts a negative income externality on the other members, so the attractiveness of the upper class club falls as it grows in size. 16 In this setting the income in the upper class is a decreasing function ξ of the measure x of individuals who belong to it.…”

Section: Social Competitionmentioning

confidence: 99%

“…The desire for status is instrumental, arising endogenously from agents' attempts to manipulate a different argument of the utility function. Ireland (1998) introduces "others" into preferences in a slightly different way: an agent's utility is a convex combination of his or her own fundamental utility, and spectators' estimate of that utility.…”

Section: Introductionmentioning

confidence: 99%

Merit, approbation and the evolution of social structure

Cowan

Jonard

2007

Journal of Economic Behavior & Organization

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In this paper we study a society in which individuals gain utility from income and from social approbation. Income is correlated with class. Approbation is given to an unobservable trait, which must be signalled through the agent's social mobility, i.e. class change. Mobility is driven by a simple mechanism involving inheritance, effort and ability. Thus social structure (class composition) is affected by individuals' quest for approbation, and we study how that affects the emergence and multiplicity of long run social organizations, including hybrid forms of dynasties and meritocracies. Specifically we observe that even though social mobility is driven purely by a meritocratic mechanism, pure dynasties can emerge. We then introduce a feedback between the size of the upper class and its income value, so that effort levels and social structure are jointly endogenous. We derive results on equilibrium effort levels and stationary (when they exist) social structures. Social organization can converge to a unique steady state, multiple long run equilibria or cycles.

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Status-seeking, income taxation and efficiency

Cited by 81 publications

References 11 publications

Old money, the nouveaux riches and Brunhilde’s marriage strategy

Old money, the nouveaux riches and Brunhilde’s marriage strategy

Conspicuous Consumption in the Land of Prince Charming

Merit, approbation and the evolution of social structure

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