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KEEPING UP WITH THE JONESES, GROWTH, AND DISTRIBUTION
Author(s) -
Tsoukis Chris
Publication year - 2007
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/j.1467-9485.2007.00430.x
Subject(s) - keeping up with the joneses , economics , consumption (sociology) , unification , inequality , welfare , distribution (mathematics) , variance (accounting) , econometrics , growth model , aggregate (composite) , microeconomics , mathematics , computer science , market economy , mathematical analysis , social science , materials science , accounting , sociology , programming language , composite material
A recent class of models on ‘keeping up with the Joneses’ suggests that comparison with the consumption of other individuals affects individual utility. This paper nests three variants of the ‘Joneses’ effect into an otherwise standard growth model. Under some conditions, growth and distribution are jointly determined, presenting thus a unification of the relevant theories. These variants are however not equivalent in terms of their effects on growth and distribution. It is also shown that, at least if comparisons‐in‐mean predominate, rises in the mean skills level and in the exogenous skills variance increase both growth and inequality with ambiguous effects on aggregate welfare.