Keeping Up with the Vaishyas? Caste and Relative Standing in India

Posted: 10 Dec 2008

See all articles by Fredrik Carlsson

Fredrik Carlsson

Goeteborg University - School of Economics & Commercial Law

Gautam Gupta

Jadavpur University - Department of Economics

Olof Johansson-Stenman

Goeteborg University - School of Economics & Commercial Law

Date Written: January 2009

Abstract

People care about relative, and not only absolute, income. This paper investigates the importance of relative income within and between castes in the Indian caste system, using a choice experimental approach. The results indicate that slightly more than half of the marginal utility of income comes from some kind of relative income effects, on average. This is comparable to the results from previous studies in other countries. Belonging to a low caste and having a low family income are associated with higher concern for relative income. Moreover, an increase in the mean income of the caste to which the individual belongs, everything else held constant, reduces utility for the individual. Thus, the negative welfare effect of having a reduced relative income compared to the own caste average income dominates the positive welfare effect due to increased relative income of the own caste compared to the income of other castes.

JEL Classification: C91, D63, H21

Suggested Citation

Carlsson, Fredrik and Gupta, Gautam and Johansson-Stenman, Olof, Keeping Up with the Vaishyas? Caste and Relative Standing in India (January 2009). Oxford Economic Papers, Vol. 61, Issue 1, pp. 52-73, 2009, Available at SSRN: https://ssrn.com/abstract=1311713 or http://dx.doi.org/gpn015

Fredrik Carlsson (Contact Author)

Goeteborg University - School of Economics & Commercial Law ( email )

Box 640
SE 405 30 Goeteborg
Sweden
+46 31-773 4174 (Phone)
+46 31-773 1043 (Fax)

Gautam Gupta

Jadavpur University - Department of Economics ( email )

Kolkata, 700032
India

Olof Johansson-Stenman

Goeteborg University - School of Economics & Commercial Law ( email )

Box 640
SE 405 30 Goeteborg
Sweden
+46-31-773 25 38 (Phone)
+46-31-773 13 26 (Fax)

HOME PAGE: http://www.handels.gu.se/econ/EEU/johansso.htm

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