Positional Concerns Among the Poor: Does Reference Group Matter? Evidence from Survey Experiments

40 Pages Posted: 11 Jun 2014

See all articles by Alpaslan Akay

Alpaslan Akay

IZA Institute of Labor Economics

Lisa Andersson

University of Gothenburg

Peter Martinsson

University of Gothenburg - Department of Economics and Statistics

Haileselassie Medhin

University of Gothenburg - School of Global Studies

Abstract

Previous research suggests a lower degree of positional concerns among people from poor countries. Yet the evidence is limited and most often builds on the assumption that people’s reference groups are the same across all individuals. We conduct a survey experiment in urban Ethiopia that is modified to include multiplicity of reference groups. We estimate positional concerns considering various reference groups to test whether the low positional concerns found in the literature is due to misspecification of the reference groups. The results show a low degree of positional concern which is highly stable across different reference groups.

Keywords: reference groups, income comparison, experiment

JEL Classification: D60, C90

Suggested Citation

Akay, Alpaslan and Andersson, Lisa and Martinsson, Peter and Medhin, Haileselassie, Positional Concerns Among the Poor: Does Reference Group Matter? Evidence from Survey Experiments. IZA Discussion Paper No. 8215, Available at SSRN: https://ssrn.com/abstract=2448791

Alpaslan Akay (Contact Author)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Lisa Andersson

University of Gothenburg ( email )

Viktoriagatan 30
Göteborg, 405 30
Sweden

Peter Martinsson

University of Gothenburg - Department of Economics and Statistics ( email )

Box 640
Vasagatan 1, E-building, floor 5 & 6
Göteborg, 40530
Sweden

Haileselassie Medhin

University of Gothenburg - School of Global Studies ( email )

POB 700
Gothenburg, SE 40530
Sweden

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