Wealth inequality under “keeping up with the Joneses” preferences

Claudio Campanale ()

Economics Letters, 2016, vol. 145, issue C, 282-285

Abstract: In the present paper I introduce “keeping up with the Joneses preferences” in an otherwise standard heterogeneous agent economy. The model simulations show that this kind of preferences can generate a substantial increase in wealth inequality compared to an equal model with standard expected utility.

Keywords: ‘‘Keeping up with the Joneses”; Consumption cascades; Heterogeneous agents; Wealth inequality (search for similar items in EconPapers)
JEL-codes: D21 E21 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:145:y:2016:i:c:p:282-285

DOI: 10.1016/j.econlet.2016.06.035

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