Is relative income of overriding importance for individuals?
Author InfoKenneth V. Greene Phillip J. Nelson Abstract Purpose – The purpose of this paper is to reexamine the idea currently rampant in the mainstream economics literature that it is relative rather than real income that is of most importance for individual well-being and that both evidence on expressed happiness and individual “choices” in surveys provide strong evidence for that position. Design/methodology/approach – A reconsideration of the theory, extensive new survey results, and presentation of material relevant for individuals’ actual choices. Findings – The idea that other’s higher incomes leaves others worse off really is not convincing, the evidence from surveys that people really have preferences for living in societies where their relative income is high at the expense of real income is wrong and that people’s actual choices reveal them to be interested in real rather than relative income. Practical implications – Those social commentators who deride the negative externa
Related Questions
- What is the difference between the relative importance of an income source in Sections 9 and 10 and a sources share of aggregate income in Section 11?
- What is the difference between the relative importance of an income source in Sections 8 and 9 and a sources share of aggregate income in Section 10?
- Do statistics on the relative importance of income sources accurately reflect the resources available to the elderly?
