Earlier today I said about Luxury Fever:
Frank offers no evidence whatsoever that the activities he dislikes and wants to tax in fact cause more inefficient status-seeking than the activities he likes and wants to subsidize.
While that was true of that book, I wondered if Frank had offered evidence elsewhere. I didn’t find any mentioned in a half dozen academic articles I read at his website, but searching more widely I found four articles with data on comparative positionality.
In Economica in 2007, Carlsson, Johansson-Stenman and Martinsson reported:
Based on a random sample in Sweden, income and cars are found to
be highly positional, on average, in contrast to leisure and car safety.
In the Journal of Economic Behavior and Organization (JEBO) in 2005, Alpizar, Carlsson, and Johansson-Stenman reported:
Goods widely considered positional, like houses and car ownership, are also found to be more positional than goods typically seen as non-positional, such as vacation and insurance. Income is in between. … Positionality is considerable also for vacation and insurance. … Women care more about relative income and consumption than men do. … Students majoring in economics, law, and social sciences tend to make more positional choices than … technology, natural sciences, and other subjects.
In the American Economic Review in 2005, Solnick and Hemenway reported:
We did not find any significant influence of age, gender or income. … Goods (e.g. eat out at a restaurant, playgrounds in the neighborhood) were more positional than bads (e.g. unpleasant dental procedures, potholes in your neighborhood). … Subjects were more likely to make positional choices for public goods than for private goods. … Health and safety issues were among the least positional.
In 1998 in JEBO the same authors reported:
Physical attractiveness and intelligence among the most positional goods and vacation time the least. … Positional answers were more common when choosing for one’s child. … Answers for two bads … were among the least positional. … [Results] did not differ by any demographic category, except that students were more likely to make positional choices than either faculty or staff. … The largest and most significant effects of student’s status were seen for questions on their own attractiveness and their child’s attractiveness.
Very interesting. I take the results seriously, but it's also important to test what people say against what they do. Besides looking at immigration data, can you guys think of ways to test some of these things?
The different response percentages between the two money questions is interesting. The obvious hypothesis this suggests to me is that the value people give to money drops off above some maximum (presumeably, however much they feel they need to buy the tangible wealth to live comfortably), after which they value money primarily as an indicator of social status which requires having more than other people do.
I recall seeing research showing that the correlation of wealth and happiness is very strong at lower incomes, but weakens above some income level, which seems potentially related, but I don't remember the source.