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Article: The wealth distribution and the demand for status

TitleThe wealth distribution and the demand for status
Authors
KeywordsPreference for Status
Spirit of Capitalism
Wealth Distribution
Issue Date2009
PublisherCambridge University Press. The Journal's web site is located at http://journals.cambridge.org/action/displayJournal?jid=MDY
Citation
Macroeconomic Dynamics, 2009, v. 13 SUPPL. S1, p. 1-30 How to Cite?
AbstractStandard economic theories of asset markets assume that assets are valued entirely for the consumption streams they can finance. This paper examines the introduction of the demand for status (as a function of wealth) into a model of uninsurable idiosyncratic riskthe "spirit of capitalism" ("soc") assumption. We find that soc preferences lead to less inequality in wealth; placing wealth into the utility function leads to a shrinking wealth distribution. The drop in wealth concentration is smaller if the utility function implies status is a luxury good, but no parametrization leads to higher wealth Gini coefficients than the benchmark case. We then consider the consequences of revenue-neutral tax reforms with and without soc preferences, finding that they make little difference for this policy experiment. © Cambridge University Press 2009.
Persistent Identifierhttp://hdl.handle.net/10722/85607
ISSN
2015 Impact Factor: 0.741
2015 SCImago Journal Rankings: 0.601
References

 

DC FieldValueLanguage
dc.contributor.authorLuo, Yen_HK
dc.contributor.authorYoung, ERen_HK
dc.date.accessioned2010-09-06T09:07:07Z-
dc.date.available2010-09-06T09:07:07Z-
dc.date.issued2009en_HK
dc.identifier.citationMacroeconomic Dynamics, 2009, v. 13 SUPPL. S1, p. 1-30en_HK
dc.identifier.issn1365-1005en_HK
dc.identifier.urihttp://hdl.handle.net/10722/85607-
dc.description.abstractStandard economic theories of asset markets assume that assets are valued entirely for the consumption streams they can finance. This paper examines the introduction of the demand for status (as a function of wealth) into a model of uninsurable idiosyncratic riskthe "spirit of capitalism" ("soc") assumption. We find that soc preferences lead to less inequality in wealth; placing wealth into the utility function leads to a shrinking wealth distribution. The drop in wealth concentration is smaller if the utility function implies status is a luxury good, but no parametrization leads to higher wealth Gini coefficients than the benchmark case. We then consider the consequences of revenue-neutral tax reforms with and without soc preferences, finding that they make little difference for this policy experiment. © Cambridge University Press 2009.en_HK
dc.languageengen_HK
dc.publisherCambridge University Press. The Journal's web site is located at http://journals.cambridge.org/action/displayJournal?jid=MDYen_HK
dc.relation.ispartofMacroeconomic Dynamicsen_HK
dc.rightsMacroeconomic Dynamics. Copyright © Cambridge University Press.en_HK
dc.subjectPreference for Statusen_HK
dc.subjectSpirit of Capitalismen_HK
dc.subjectWealth Distributionen_HK
dc.titleThe wealth distribution and the demand for statusen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=1365-1005&volume=13&spage=1&epage=30&date=2009&atitle=The+Wealth+Distribution+and+the+Demand+for+Statusen_HK
dc.identifier.emailLuo, Y: yluo@econ.hku.hken_HK
dc.identifier.authorityLuo, Y=rp01083en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1017/S1365100509080092en_HK
dc.identifier.scopuseid_2-s2.0-70449448000en_HK
dc.identifier.hkuros155466en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-70449448000&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume13en_HK
dc.identifier.issueSUPPL. S1en_HK
dc.identifier.spage1en_HK
dc.identifier.epage30en_HK
dc.identifier.eissn1469-8056-
dc.publisher.placeUnited Kingdomen_HK
dc.identifier.scopusauthoridLuo, Y=23767888300en_HK
dc.identifier.scopusauthoridYoung, ER=16744833200en_HK

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