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

46 Pages Posted: 21 Sep 2012

See all articles by Abel Brodeur

Abel Brodeur

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

Sarah Fleche

Paris School of Economics (PSE)

Multiple version iconThere are 2 versions of this paper

Date Written: September 20, 2012

Abstract

This paper analyzes the effects of income comparisons on utility using data on self-reported well-being. We rely on a very large survey (BRFSS) and an unprecedented survey conducted by the City of Somerville in order to study this relationship. These data sets allow us to study income comparisons at the county, ZIP code and street-levels. While there is a negative association between respondents' well-being and median income at the county and street-levels, this is the opposite at the ZIP code-level. We disentangle the effects of pure social comparisons and local public goods by including the relative rank in the income distribution in our model. Conditional on relative rank, there is a positive relationship between well-being and median county income. Last, we fi nd evidence of asymmetry and nonlinearities in the comparison process.

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

JEL Classification: C25, D00, J31

Suggested Citation

Brodeur, Abel and Fleche, Sarah, Where the Streets Have a Name: Income Comparisons in the US (September 20, 2012). Available at SSRN: https://ssrn.com/abstract=2149727 or http://dx.doi.org/10.2139/ssrn.2149727

Abel Brodeur (Contact Author)

University of Ottawa - Department of Economics ( email )

200 Wilbrod Street
Ottawa, Ontario K1N 6N5
Canada

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

IZA Institute of Labor Economics ( email )

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

Sarah Fleche

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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