How status concerns can make us rich and happy

Holger Strulik

No 170, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: This paper considers an overlapping generations model of economic growth populated by two types of individuals. Competitive types compare future consumption (i.e. wealth) with the mean. Self-sufficient types derive utility simply from their own consumption and do not compare themselves with others. I derive a condition under which the utility (happiness) of both types increases when the economy is populated by a larger share of competitive types. In the long-run the condition is always fulfilled when the economy is capable of economic growth. The reason for this phenomenon is that competitive types generate higher savings and thus higher aggregate capital stock and income per capita, which raises utility of both types. I show that the result is robust to the consideration of endogenous work effort and that a sufficiently high share of competitive types in a society can be inevitable for long-run economic growth to exist.

Keywords: status preferences; happiness; economic growth (search for similar items in EconPapers)
JEL-codes: D90 E21 O40 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-dge, nep-fdg, nep-hap, nep-hpe and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/80432/1/766254739.pdf (application/pdf)

Related works:
Journal Article: How Status Concerns Can Make Us Rich and Happy (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:170

Access Statistics for this paper

More papers in University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().