Where the Streets Have a Name: Income Comparisons in the Us

55 Pages Posted: 16 Mar 2013

See all articles by Abel Brodeur

Abel Brodeur

IZA Institute of Labor Economics; University of Ottawa - Department of Economics

Sarah Fleche

Paris School of Economics (PSE)

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Abstract

This paper analyses how neighbors' income affect agents' well-being using unprecedented data from the BRFSS and the City of Somerville. We conduct a multi-scale approach at the county, ZIP code and street-levels and find that the association between well-being and neighbors' income follows an inverted U-shaped pattern in the size of the area. We find a negative relationship between well-being and neighbors' income in the county of residence, but the opposite at the ZIP code-level. Our results are consistent with the fact that agents enjoy living in a rich ZIP code but also having poor faraway neighbors since they have preferences for high social status. We test explicitly this interpretation by including amenities and the relative rank in the local income distribution in our model. At the street-level, we find a negative association between neighbors' income and self-reported well-being indicating the presence of income comparisons between very close neighbors.

Keywords: income comparisons, rank, relative utility, social interactions, social status, well-being

JEL Classification: C25, D00, J31

Suggested Citation

Brodeur, Abel and Brodeur, Abel and Fleche, Sarah, Where the Streets Have a Name: Income Comparisons in the Us. IZA Discussion Paper No. 7256, Available at SSRN: https://ssrn.com/abstract=2234278 or http://dx.doi.org/10.2139/ssrn.2234278

Abel Brodeur (Contact Author)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

University of Ottawa - Department of Economics ( email )

200 Wilbrod Street
Ottawa, Ontario K1N 6N5
Canada

HOME PAGE: http://https://sites.google.com/site/abelbrodeur/

Sarah Fleche

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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