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Conspicuous consumption and satisfaction

Rainer Winkelmann

No 30, ECON - Working Papers from Department of Economics - University of Zurich

Abstract: Traditional tools of welfare economics identify the envy-related welfare loss from conspicuous consumption only under very strong assumptions. Measured income and life satisfaction offers an alternative for estimating such consumption externalities. The approach is developed in the context of luxury car consumption (Ferraris and Porsches) in Switzerland. Results from household panel data and fixed effects panel regressions suggest that the prevalence of luxury cars in the municipality of residence has a negative impact on own income satisfaction.

Keywords: Ferrari; Porsche; status; consumption externality; Swiss Household Panel (search for similar items in EconPapers)
JEL-codes: D12 D62 I31 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-hap
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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