Positional Concerns through the Life Cycle: Evidence from Subjective Well-Being Data and Survey Experiments

Abstract

This paper uses both subjective well-being and survey experimental data to analyze how people’s positional concerns regarding income and goods vary with age. The subjective wellbeing approach is mainly based on German panel data for the period 1984-2009 (German Socio-Economic Panel), while the survey experimental approach is based on a tailor-made experimental design conducted among Swedish adults. Our analysis suggests that the degree of positional concerns is not homogenous across the life cycle. Our different analytical approaches show a robust life cycle pattern of positional concerns: young people experience no or a low degree of positional concerns, yet the level of concerns for income increases gradually and significantly with age. The results also differ across goods: while car consumption is similar to income, the positional concern for leisure time decreases through the life cycle.