Relative Wealth, Status Seeking, and Catching Up

Ngo Long and Koji Shimomura

CIRANO Working Papers from CIRANO

Abstract: We show that, if relative wealth appears in the utility function, for example due to status seeking, then under certain conditions on the curvature of the utility function and the production function, the poor will eventually catch up with the rich. We give sufficient conditions for the final distribution of wealth to be independent of the initial distribution, and conditions for saddlepoint stability in a two-class model. Nous démontrons que si l'utilité est une fonction de la richesse relative, peut-être à cause de la recherche du standing, alors, sous certaines hypothèses concernant la courbature de la fonction d'utilité et de la fonction de production, les gens pauvres peuvent rattraper les gens riches. Nous donnons des conditions suffisantes pour que la distribution de richesse finale soit indépendante de la distribution initiale, ainsi que les conditions suffisantes pour la stabilité au sens du point de selle.

Keywords: Status seeking; relative wealth; catching-up; La recherche du standing; la richesse relative; le rattrapage (search for similar items in EconPapers)
JEL-codes: D31 D91 (search for similar items in EconPapers)
Date: 2002-01-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Relative wealth, status-seeking, and catching-up (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2002s-09

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