Income-comparison Attitudes in the US and the UK: Evidence from Discrete-choice Experiments / Hitoshi Shigeoka, Katsunori Yamada.

Format:

Book

Author/Creator:

Shigeoka, Hitoshi.

Contributor:

National Bureau of Economic Research.

Yamada, Katsunori.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21998.

NBER working paper series no. w21998

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Income-comparison Attitudes in the US and the UK

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

Economists have long been aware of utility externalities such as a tendency to compare own income with others'. If welfare losses from income comparisons are significant, any governmental interventions that alter such attitudes may have large welfare consequences. We conduct an original online survey of discrete-choice questions to estimate such attitudes in the US and the UK. We find that the UK respondents compare incomes more than US respondents do. We then manipulate our respondents with simple information to examine whether the attitudes can be altered. Our information treatment suggesting that comparing income with others may diminish welfare even when income levels increase makes UK respondents compare incomes more rather than less. Interestingly, US respondents are not affected at all. The mechanism behind the UK results seems to be that our treatment gives moral license to make income comparisons by providing information that others do so.

Notes:

Print version record

February 2016.