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Envie, loisir et restrictions sur les heures de travail.
Author(s) -
AlvarezCuadrado Francisco
Publication year - 2007
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1365-2966.2007.00452.x
Subject(s) - consumption (sociology) , economics , externality , welfare , context (archaeology) , microeconomics , planner , outcome (game theory) , capital (architecture) , social planner , market failure , public economics , computer science , market economy , history , paleontology , social science , archaeology , sociology , programming language , biology
. We present a simple model of capital accumulation where agents care about their consumption relative to the consumption of other members of society, ‘envy,’ In this context we quantify the extent of the distortions and welfare costs associated with envy. Under conservative estimates of envy we find that the implied welfare losses are substantial. We explore the implications of alternative policy arrangements designed to minimize the effects of the consumption externality. Our results suggest that if the optimal tax policy is not politically feasible, restrictions on working hours provide an alternative tool to induce a market outcome that resembles the efficient allocation achieved under a benevolent central planner. JEL classification: D62, H21