Positional Concerns among the Poor: Does Reference Group Matter? Evidence from Survey Experiments

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Previous research suggests a lower degree of positional concerns among people from poor countries. Yet the evidence is limited and most often builds on the assumption that people's reference groups are the same across all individuals. We conduct a survey experiment in urban Ethiopia that is modified to include multiplicity of reference groups. We estimate positional concerns considering various reference groups to test whether the low positional concerns found in the literature is due to misspecification of the reference groups. The results show a low degree of positional concern which is highly stable across different reference groups.JEL Classification: D60, C90

Do You Prefer Having More or More than Others in the Workplace? A Quasi‐experimental Survey in Algeria

“…This result is also similar to the finding obtained by Celse () about praise from supervisors. Moreover, in order to compare our findings with previous studies in countries whose culture focused on collectivism (e.g., Solnick et al ., ; Carlsson and Qin, ; Akay et al ., ), let us focus on income, which is the only domain these studies share. While Solnick et al .…”

“…This result is also similar to the finding obtained by Celse (2012) about praise from supervisors. Moreover, in order to compare our findings with previous studies in countries whose culture focused on collectivism (e.g., Solnick et al, 2007;Carlsson and Qin, 2010;Akay et al, 2014), let us focus on income, which is the only domain these studies share. While Solnick et al (2007) and Carlsson and Qin (2010) found that more than 50% of their Chinese respondents picked the positional situation, between 25% and 29% of individuals in our sample did so.…”

“…Thanks to a survey experiment in urban Ethiopia, Akay et al . () found a low degree of positional concerns, highly stable across different reference groups. To explain these mixed results especially in China, some researchers have noted a possible selection bias (Solnick et al ., ) and an increased emphasis on competitive and self‐oriented goals such as ‘social status, power and wealth’ and a corresponding decreased emphasis on values associated with family, authority, and other relationships, such as ‘equality of income’ and ‘modesty and contentment’ (Yang, ).…”

“…Unlike the previous study, Carlsson et al (2007b) found low degree of positionality among farmers in rural Vietnam, while Carlsson and Qin (2010) showed that 'the concern for relative standing seems to be equally strong among rural households in China' when they compare them with those obtained in developed countries. Thanks to a survey experiment in urban Ethiopia, Akay et al (2014) found a low degree of positional concerns, highly stable across different reference groups. To explain these mixed results especially in China, some researchers have noted a possible selection bias (Solnick et al, 2007) and an increased emphasis on competitive and self-oriented goals such as 'social status, power and wealth' and a corresponding decreased emphasis on values associated with family, authority, and other relationships, such as 'equality of income' and 'modesty and contentment' (Yang, 1996).…”

“…Moreover, our study is conducted in a developing country, namely, Algeria (North Africa), which constitutes another originality of our paper. Indeed, except some few contributions (Carlsson et al ., ; Solnick et al ., ; Carlsson and Qin, ; Bekir et al ., , ; Akay et al ., ), most previous surveys are conducted in developed countries, notably, United States and Sweden. Yet the available economic literature offers mixed results regarding the differences of positional concerns across countries.…”