The paper addresses the question whether utility may be viewed as a completely relative concept. In a dynamic setting this means that one has to model both habit formation and utility interdependence. The resulting model contains unobservable variables and requires panel data to be estimated. Using the first two waves of an annual panel in The Netherlands, different specifications of the model are estimated, involving...

Healthy people generally underestimate the self-reported well-being of people with disabilities and serious illnesses. The cause of this discrepancy is in dispute, and the present study provides evidence for 2 causes. First, healthy people fail to anticipate hedonic adaptation to poor health. Using an ecological momentary assessment measure of mood, the authors failed to find evidence that hemodialysis patients are less happy than healthy nonpatients...

Levels of expectation are considered to be distributed along a continuum with realistic at one extreme and unrealistic at the other. Experimental data were analyzed with reference to the several criteria. Reliability and generality of the level of expectation were shown to be sensitive to the position of the expectations on the realism-unrealism continuum. Failure to control this characteristic of expectations may lead to disagreements...

We ask whether women's decisions to be in the labor force may be affected by the decisions of other women in ways not captured by standard models. We develop a model that augments the simple neoclassical framework by introducing relative income concerns into women's (or families') utility functions. In this model, the entry of some women into paid employment can spur the entry of other...

This paper attempts to test the hypothesis that utility depends on income relative to a ‘comparison’ or reference level. Using data on 5,000 British workers, it provides two findings. First, workers' reported satisfaction levels are shown to be inversely related to their comparison wage rates. Second, holding income constant, satisfaction levels are shown to be strongly declining in the level of education. More generally, the...

초록 없음  Becker, G. S. (1974). A theory of social interactions. Journal of political economy, 82(6), 1063-1093.https://doi.org/10.1086/260265

This paper describes a theory of rational emulation and deviance. It assumes that individuals care about relative position (or `status'), and constructs a model of decision-making in social and economic settings. The analysis shows why individuals who want to be different from others will, paradoxically, find it rational to imitate other people. The paper also provides a choice-theoretic foundation for a number of ideas in...

초록 없음  Pollak, R. A. (1976). Interdependent preferences. The American Economic Review, 66(3), 309-320. https://www.jstor.org/stable/1828165   

초록 없음  Frank, R. H. (1985). The demand for unobservable and other nonpositional goods. The American Economic Review, 75(1), 101-116.     https://www.jstor.org/stable/1812706 

Saving and growth are strongly positively correlated across countries. Recent empirical evidence suggests that this correlation holds largely because high growth leads to high saving, not the other way around. This evidence is difficult to reconcile with standard growth models, since forward-looking consumers with standard utility should save less in a fast-growing economy because they know they will be richer in the future than they...