Social Capital and Relative Income Concerns: Evidence from 26 Countries

Fischer, Justina  A. V.; Torgler, Benno

doi:10.2139/ssrn.971575

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Social Capital and Relative Income Concerns: Evidence from 26 Countries

University of St. Gallen, Department of Economics, Discussion Paper No. 2007-05

66 Pages Posted: 27 Mar 2007

See all articles by Justina A. V. Fischer

Justina A. V. Fischer

Organization for Economic Co-Operation and Development (OECD); Stockholm School of Economics; University of Hohenheim

Benno Torgler

Yale University - Yale Center for International and Area Studies

Date Written: February 2007

Abstract

Research evidence on the impact of relative income position on individuals' attitudes and behaviour is sorely lacking. Therefore, using the International Social Survey Programme 1998 data from 26 countries this paper investigates the impact of relative income on 14 measurements of social capital. We find support for a considerable deleterious positional concern effect of persons below the reference income. This effect is more sizeable by far than the beneficial impact of a relative income advantage. Most of the results indicate that such an effect is non-linear. Lastly, changing the reference group (regional versus national) produces no significant differences in the results.

Keywords: Relative income, positional concerns, social capital, social norms, happiness

JEL Classification: Z13, I30, D31

Suggested Citation: Suggested Citation

Fischer, Justina A.V. and Torgler, Benno, Social Capital and Relative Income Concerns: Evidence from 26 Countries (February 2007). University of St. Gallen, Department of Economics, Discussion Paper No. 2007-05, Available at SSRN: https://ssrn.com/abstract=971575 or http://dx.doi.org/10.2139/ssrn.971575