Do Positional Concerns Destroy Social Capital: Evidence from 26 Countries

24 Pages Posted: 27 Feb 2013

See all articles by Justina A.V. Fischer

Justina A.V. Fischer

affiliation not provided to SSRN

Benno Torgler

Queensland University of Technology; CREMA; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: April 2013

Abstract

Research on the effects of positional concerns on individuals' attitudes and behavior is sorely lacking. To address this deficiency, we use the International Social Survey Programme 1998 data on 25,000 individuals from 26 countries to investigate the impact of relative income position on three facets of social capital: horizontal and vertical trust as well as norm compliance. Testing relative deprivation theory, we identify a deleterious positional income effect for persons below the reference income, particularly for their social trust and confidence in secular institutions. Also often a social capital‐lowering effect of relative income advantage occurs, while a rise in absolute income almost always contributes positively. These results indicate that a rise in income inequality in a society too large is rather detrimental to the formation of social capital.

JEL Classification: Z130, I300, D310

Suggested Citation

Fischer, Justina A.V. and Torgler, Benno, Do Positional Concerns Destroy Social Capital: Evidence from 26 Countries (April 2013). Economic Inquiry, Vol. 51, Issue 2, pp. 1542-1565, 2013. Available at SSRN: https://ssrn.com/abstract=2225684 or http://dx.doi.org/10.1111/j.1465-7295.2011.00441.x

Justina A.V. Fischer (Contact Author)

affiliation not provided to SSRN

No Address Available

Benno Torgler

Queensland University of Technology ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

CREMA

Gellertstrasse 18
Basel
Zurich, CH 8006
Switzerland

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

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