|
on Economics of Happiness |
Issue of 2014‒11‒01
two papers chosen by Viviana Di Giovinazzo Università degli Studi di Milano-Bicocca |
By: | David Ulph (University of St Andrews) |
Abstract: | This paper investigates how well-being varies with individual wage rates when individuals care about relative consumption and so there are Veblen effects – Keeping up with the Joneses – leading individuals to over-work. In the case where individuals compare themselves with their peers – those with the same wage-rate - it is shown that Keeping up with the Joneses leads some individuals to work who otherwise would have chosen not to. Moreover for these individuals well-being is a decreasing function of the wage rate - contrary to standard theory. So those who are worst-off in society are no longer those on the lowest wage. |
Keywords: | Veblen Effects; consumer behaviour; Nash equilibrium; wages and well- being |
JEL: | D11 I31 J22 |
Date: | 2014–09–20 |
URL: | http://d.repec.org/n?u=RePEc:san:wpecon:1412&r=hap |
By: | P.W. Miller; C. Mulvey |
URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:93-08&r=hap |