Conspicuous Consumption, Social Status and Measures of Poverty – An Example

Marjit, Sugata and Mandal, Biswajit (2011): Conspicuous Consumption, Social Status and Measures of Poverty – An Example.

Abstract

The existing literature on poverty has discussed about the conflict between income-based measure and nutrition-based measure. However, the role of social inequality in influencing individual’s consumption and inducing greater consumption of the so called status good has been relatively undermined. This paper attempts to show that in presence of inequality a status driven utility function reconciles the conflict between income based and nutrition based measures of poverty.

• Item Type: MPRA Paper
• Language: English
• Keywords: Inequality, Utility, Poverty
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory; D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I32 - Measurement and Analysis of Poverty

References

Beath, J. and Fitzroy, F. (2010) “Status, Happiness and Relative Income,” mimeo, University of St. Andrews.

Deaton, A. and Drèze, J (2009) “Food and Nutrition in India: Facts and Interpretations,” Economic and Political Weekly, 44(7), pp. 42-65.

Fafchamps, M. and Shilpi, F. (2008). "Subjective welfare, isolation, and relative consumption," Journal of Development Economics, 86(1), pp 43-60.

Ghiglino, C and Goyal, S (2008). “Keeping up with the neighbors: social interaction in a market economy”, mimeo, University of Essex.

Hopkins, E and Kornienko, T (2010). “Which Inequality? The Inequality of Endowments Versus the Inequality of Rewards”, mimeo, University of Edinburgh. Kanbur, R. and Toumala, M. (2009). “Relativity, Inequality and Optimal Nonlinear Income Taxation”, mimeo, University of Tampere.

Ku, H and Salmon, T. C. (2009). “Incentive Effects of Inequality and Economic Development”, mimeo, Florida State University.

Patnaik, U (2007). “Neoliberalism and Rural Poverty in India”, Economic and Political Weekly, 42(30) 28th July, pp 3132-50.

Sivanathan,N. and Pettit, N. C. (2010). “Protecting the self through consumption: Status goods as affirmational commodities”, Journal of Experimental Social Psychology, 46( 3), pp 564- 570.