Relative Income Position and Performance: An Empirical Panel Analysis

37 Pages Posted: 28 Mar 2006

See all articles by Benno Torgler

Benno Torgler

Yale University - Yale Center for International and Area Studies

Sascha L. Schmidt

EBS Universität für Wirtschaft und Recht - Institute for Sports, Business & Society

Bruno S. Frey

CREMA; University of Basel

Date Written: April 2006

Abstract

Many studies have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. However, behavioral evidence is rare. This paper provides an empirical analysis on how individuals' relative income position affects their performance. Using a unique data set for 1114 soccer players over a period of eight seasons (2833 observations), our analysis suggests that the larger the income differences within a team, the worse the performance of the soccer players is. The more the players are integrated in a particular social environment (their team), the more evident this negative effect is.

Keywords: Relative Income, Positional Concerns, Envy, Performance, Social Integration

JEL Classification: D000, D600, 8222, 9210, L830

Suggested Citation

Torgler, Benno and Schmidt, Sascha L. and Frey, Bruno S., Relative Income Position and Performance: An Empirical Panel Analysis (April 2006). FEEM Working Paper No. 39.2006. Available at SSRN: https://ssrn.com/abstract=889328 or http://dx.doi.org/10.2139/ssrn.889328

Benno Torgler (Contact Author)

Yale University - Yale Center for International and Area Studies ( email )

P.O. Box 208206
New Haven, CT 06520-8206
United States

HOME PAGE: http://www.crema-research.ch/fellowseiten/torgler.htm

Sascha L. Schmidt

EBS Universität für Wirtschaft und Recht - Institute for Sports, Business & Society ( email )

Gustav-Stresemann-Ring 3
65189 Wiesbaden, Hessen 65189
Germany
0611 7102 2064 (Phone)

Bruno S. Frey

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
Switzerland
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002
Switzerland

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