Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) LSE RSS Contact Us YouTube Twitter


Development Economics Paper
Does Envy Destroy Social Fundamentals? The Impact of Relative Income Position on Social Capital
Justina A.V. Fischer and Benno Torgler February 2006
Paper No' DEDPS 46:
Full Paper (pdf)

JEL Classification: Z130; H260; I310; D000; D600

Tags: relative income position; envy; positional concerns; social capital; social norms; happiness

Research evidence on the impact of relative income position on individual attitudes and behaviour is sorely lacking. Therefore, this paper assesses such positional impact on social capital by applying 14 different measurements to International Social Survey Programme data from 25 countries. We find support for a positional concern effect or ‘envy’ whose magnitude in several cases is quite substantial. The results indicate that such an effect is non-linear. In addition, we find an indication that absolute income level is also relevant. Lastly, changing the reference group (regional versus national) produces no significant differences in the results.