We use original data regarding the array of Italian winery coalitions (wine denominations) to analyze the economics and determinants of collective reputation. We first run a cross‐sectional analysis with 2008 data and the full set of control variables, then move to the dynamics of collective reputation with panel data analysis on a 30‐year time span (1978–2008). Group reputation is history‐dependent. In particular, past bad collective behavior increases the probability of being stuck in a “bad reputation trap.” Minimum quality standards and effective enforcement are fundamental drivers of group reputation. The relationship between group size and collective reputation is non‐linear: free entry may not be optimal due to free‐riding problems. Finally, institutional signals such as the wine classification system are useful because they can be used by consumers as easily available proxies for information that is much more difficult to acquire.

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Our paper provides some novel evidence on the burgeoning literature on life satisfaction and relative comparisons by showing that in the last 30 years comparisons with the wellbeing of top income countries have generated progressively more negative feelings on a large sample of individuals in the Eurobarometer survey. The paper contributes in two main directions: (i) it shows that countries, and not just neighbors, can be reference groups; (ii) it documents a globalization effect by which distant countries become progressively closer and comparisons among them more intense and relevant. Our findings may be interpreted in support of the well known hypothesis that migratory decisions are affected by the gap in economic wellbeing between origin and destination country since they document that such gap affects individual life satisfaction.

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We investigate the effects of the 2004 Tsunami on a sample of microfinance borrowers. Our findings show that the severe loss of income of damaged borrowers only partially explains the dip in wellbeing. This is because the latter is also related to economic losses not measured by current income (that is, loss in wealth or in permanent income) and by psychological or emotional effects. Finally, we find that the role of risk on the Tsunami impact is partially captured by the interaction of the damage dummy with borrowers' productive activity.