We demonstrate that interpersonal comparisons lead to ”keeping up with the Joneses”-behavior. Using annual household data from the German Socio-Economic Panel, we estimate the causal effect of changes in reference consumption, defined as the consumption level of all households who are perceived to be richer, on household savings and consumption. When controlling for own income, an increase in reference ...
In:
Journal of Economic Behavior & Organization
106 (2014), October 2014, 254-268
| Moritz Drechsel-Grau, Kai D. Schmid