Status Effects and Negative Utility Growth
Cecilia Garcia-Penalosa () and
Peter Funk ()
Economic Journal, 2001, vol. 111, issue 473, 642-65
This paper explains the observed stagnation of "happiness" measures through a growth model in which agents care about conspicuous consumption. "Normal goods" confer direct utility, while "status goods" confer utility only at the expense of others. Firms can improve the quality of both goods through R&D. The Nash equilibrium of the consumer game results in the share of expenditure on status goods increasing with the number of times the status good has been improved. As the economy grows, resources for innovation are transferred entirely to status-good R&D. The resulting long-run rate of utility growth is negative.
References: Add references at CitEc
Citations View citations in EconPapers (64) Track citations by RSS feed
Downloads: (external link)
http://www.blackwell-synergy.com/servlet/useragent ... =473&year=&part=null link to full text (text/html)
Access to full text is restricted to subscribers.
Working Paper: Status Effects and Neganive Utility Growth (1998)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ecj:econjl:v:111:y:2001:i:473:p:642-65
Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0013-0133
Access Statistics for this article
Economic Journal is currently edited by Martin Cripps, Steve Machin, Woulter den Haan, Andrea Galeotti, Rachel Griffith and Frederic Vermeulen
More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Series data maintained by Wiley-Blackwell Digital Licensing ().