nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2008‒06‒27
four papers chosen by
Maximo Rossi
University of the Republic

  1. The Role of religion in economic and demographic behavior in the US: a review of recent literature. By Evelyn L. Lehrer
  2. Looking Awkward When Winning and Foolish When Losing: Inequity Aversion and Performance in the Field By Benno Torgler; Markus Schaffner; Bruno S.Frey; Sascha L. Schmidt
  3. Do Employees Care About Their Relative Position? Behavioural Evidence Focusing on Performance. By Benno Torgler; Markus Schaffner; Sascha L. Schmidt; Bruno S.Frey
  4. Meet the Joneses: An Empirical Investigation of Reference Groups in Relative Income Position Comparisons By Markus Schaffner; Benno Torgler

  1. By: Evelyn L. Lehrer (University of Illinois at Chicago - Economics Department)
    Abstract: The past few years have witnessed substantial progress in our understanding of how religious factors influence economic and demographic factors including education, female employment, fertility, and union formation and dissolution. In this paper I highlight results from recent studies on the role of religion in these and related economic and demographic behaviors, updating the critical literature review presented in an earlier article (Lehrer 2004a). Based on the theoretical framework suggested there, I also offer a reinterpretation of previous findings in the literature and identify promising avenues for future research. The focus of this review is on the United States, but a few closely related studies that employ data from other countries are also included.
    Keywords: religion; fertility; education.
    JEL: J24 J15 J22
    Date: 2008–06–09
  2. By: Benno Torgler; Markus Schaffner; Bruno S.Frey; Sascha L. Schmidt
    Abstract: The experimental literature and studies using survey data have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. Individuals are concerned about social comparisons. However, behavioral evidence in the field is rare. This paper provides an empirical analysis, testing the model of inequity aversion using two unique panel data sets for basketball and soccer players. We find support that the concept of inequity aversion helps to understand how the relative income situation affects performance in a real competitive environment with real tasks and real incentives.
    Keywords: Inequity aversion, relative income, positional concerns, envy, social comparison, performance, interdependent preferences
    JEL: D00 D60 L83
    Date: 2008–06–16
  3. By: Benno Torgler; Markus Schaffner; Sascha L. Schmidt; Bruno S.Frey
    Abstract: Do employees care about their relative (economic) position among co-workers in an organization? And if so, does it raise or lower their performance? Behavioral evidence on these important questions is rare. This paper takes a novel approach to answering these questions, working with sports data from two different disciplines, basketball and soccer. These sports tournaments take place in a controlled environment defined by the rules of the game. We find considerable support that positional concerns and envy reduce individual performance. In contrast, there does not seem to be any tolerance for income disparity, based on the hope that such differences signal that better times are under way. Positive behavioral consequences are observed for those who are experiencing better times.
    Keywords: Relative income, positional concerns, envy, social comparison, relative derivation, performance
    JEL: D00 D60 L83
    Date: 2008–06–16
  4. By: Markus Schaffner; Benno Torgler
    Abstract: It is generally understood that people care about their absolute income position, and several studies have in fact moved beyond this, showing that people also place considerable significance on their relative income position. However, empirical evidence about the behavioural consequences is scarce. We address this shortcoming by exploring the relative income effect in a (controlled) sporting contest environment. Specifically, we look at the pay-performance relationship by working with a large panel data set consisting of 26 NBA seasons. We explore how closeness affects positional concerns exploring in detail several potential reference groups. This allows checking of their relevance and of the scope of comparisons, a critical aspect in the literature that requires further investigation.
    Date: 2008–06–17

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