Income-Comparison Attitudes in the US and the UK: Evidence from Discrete-choice Experiments
37 Pages Posted: 16 Mar 2015 Last revised: 20 Nov 2018
Date Written: April 10, 2016
Economists have long been aware of utility externalities such as a tendency to compare own income with others'. If welfare losses from income comparisons are significant, any governmental interventions that alter such attitudes may have large welfare consequences. We conduct an original online survey of discrete-choice questions to estimate such attitudes in the US and the UK. We find that the UK respondents compare incomes more than US respondents do. We then manipulate our respondents with simple information to examine whether the attitudes can be altered. Our information treatment -- providing guidance about the possible negative consequences of one making such an income comparison -- leads UK respondents to make more income comparisons. The mechanism behind the UK results seems to be that our treatment gives moral license to make income comparisons by providing information that others do so.
Keywords: income comparison, discrete-choice experiment, inter-country survey, information treatment, randomized survey experiment
JEL Classification: C09, D01, D03
Suggested Citation: Suggested Citation