The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Social Status, Economics and

  • Chaim Fershtman
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2034

Abstract

Social status is a social reward that affects the incentive structure facing individuals. If status is provided to educated people, more people will obtain an education. The choice of occupation is affected by the social status associated with different occupations, establishing a link between social status, the equilibrium wage structure and the allocation of workers among occupations. When status is not directly observed, people try to signal it by changing their consumption choices or behaviour. The narrow paradigm of homo economicus should be extended to include social status among the basic motivations for economic decisions.

Keywords

Conspicuous consumption Economic growth Preference formation Saving Social status, economics and Veblen effect Veblen, T Wage heterogeneity, sources of Wage rigidity Weber, M 

JEL Classifications

Z13 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Chaim Fershtman
    • 1
  1. 1.