THE CONCEPT OF COMPARISON INCOME: AN HISTORICAL PERSPECTIVE

MPRA Paper from University Library of Munich, Germany

Abstract: Theories of social comparison have a long presence in the social sciences and have provided many useful insights. In economics, the idea of comparison, aspiration or relative income belongs to this theoretical framework. The first systematic usages of this idea can be found in the works of Keynes and Duesenberry. After these works the concept was relatively ignored by orthodox theorists until its recent re-appearance mainly in the fields of labour and macroeconomics. To the contrary, however, income comparisons continued to play a role in much of Keynesian inspired and Behavioural economics literature. In the last few years it has made a strong comeback in the literature of job satisfaction and of the economics of happiness. This paper attempts to trace the development of the concept in the modern history of economic thought. It also discusses the main theoretical implications of adopting income comparisons and possible reasons for its relative disregard by orthodox economics.

Keywords: Relative Income; History of Economic Thought; Wages (search for similar items in EconPapers)
JEL-codes: D31 B20 J30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his, nep-hpe, nep-lab and nep-pke
Date: 2008-05-12
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