Choosing Your Pond: Location Choices and Relative Income

Nicolas Bottan and Ricardo Perez-Truglia

No 23615, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Do individuals care about their relative income? While this is a long-standing hypothesis, revealed-preference evidence remains elusive. We provide a unique test by studying residential choices: individuals often must choose between places with different income distributions, and as a result they “choose” their relative income. We conducted a field experiment with 1,080 senior medical students who participated in the National Resident Matching Program. We estimate their preferences by combining choice data, survey data on perceptions and information-provision experiments. The evidence suggests that individuals care about their relative income and that these preferences differ across single and non-single individuals.

JEL-codes: D62 D91 I31 Z13 (search for similar items in EconPapers)
Date: 2017-07
Note: PE POL
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Citations: View citations in EconPapers (15)

Published as Nicolas L. Bottan & Ricardo Perez-Truglia, 2022. "Choosing Your Pond: Location Choices and Relative Income," The Review of Economics and Statistics, vol 104(5), pages 1010-1027.

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