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Income Inequality and Status-Seeking

Author

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  • Paskov, Marii
  • Gerxhani, Klarita
  • G. van de Werfhorst, Herman
Abstract
The objective of this paper is to study status-seeking, defined as pursuit for elevated social status, and how it relates to income inequality. Based on the literature suggesting that in unequal societies people are more concerned about their position in the social hierarchy, we hypothesize that people will also be more eager to attain enhanced social status in the eyes of others. To test this hypothesis we use repeated cross-sectional micro data from the European Social Survey (ESS), which was collected biannually from 2002 to 2012, and use it in combination with income inequality data from the Eurostat. With this data we can complement existing studies by focusing on both between- and within country over-time variability in income inequality and status-seeking. We find evidence of a positive relationship between income inequality and status seeking. However, the relationship appears to be non-linear and characterized by an inverted U-shape instead. Moreover, the analysis reveals that the relationship between income inequality and status-seeking is stronger among lower social status groups than those higher up in status hierarchy. These findings have implications for the literature and foster us to re-consider theoretical claims suggesting a linear relationship between income inequality and psycho-social outcomes.

Suggested Citation

  • Paskov, Marii & Gerxhani, Klarita & G. van de Werfhorst, Herman, 2015. "Income Inequality and Status-Seeking," INET Oxford Working Papers 2015-03, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    • Handle: RePEc:amz:wpaper:2015-03
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    File URL: https://www.inet.ox.ac.uk/files/WP3.pdf
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    References listed on IDEAS

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    1. Salverda, Wiemer & Nolan, Brian & Checchi, Daniele & Marx, Ive & McKnight, Abigail & Toth, Istvan Gy (ed.), 2014. "Changing Inequalities in Rich Countries: Analytical and Comparative Perspectives," OUP Catalogue, Oxford University Press, number 9780199687435.
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    4. Sheryl Ball & Catherine Eckel & Philip J. Grossman & William Zame, 2001. "Status in Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 161-188.
    5. Layte, Richard & Whelan, Christopher T., 2014. "Who Feels Inferior? A Test of the Status Anxiety Hypothesis of Social Inequalities in Health," Papers WP476, Economic and Social Research Institute (ESRI).
    Full references (including those not matched with items on IDEAS)

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