Abstract
This study incorporates the concept of identity to explain the relationship between relative income and subjective well-being.
Based upon the theoretical framework of an identity model developed by Akerlof and Kranton Q J Econ 115:715–753, (2000), the empirical findings of this study suggest that an increase in relative income leads to a gain in positional identity
and therefore raises the level of subjective well-being. This approach extends our understanding about the connection between
positional concern and subjective well-being and explains the importance of social comparison in shaping individuals’ preferences
and tastes. People are concerned about their relative income as it represents a positional identity of social status, dependent
upon ideals and norms derived from the interactions between an individual and others within a society.
Based upon the theoretical framework of an identity model developed by Akerlof and Kranton Q J Econ 115:715–753, (2000), the empirical findings of this study suggest that an increase in relative income leads to a gain in positional identity
and therefore raises the level of subjective well-being. This approach extends our understanding about the connection between
positional concern and subjective well-being and explains the importance of social comparison in shaping individuals’ preferences
and tastes. People are concerned about their relative income as it represents a positional identity of social status, dependent
upon ideals and norms derived from the interactions between an individual and others within a society.
- Content Type Journal Article
- Pages 1-23
- DOI 10.1007/s11205-012-0108-7
- Authors
- Wen-Chun Chang, Department of Public Finance, National Taipei University, 151 University Road, San-Shia, Taipei, Taiwan
- Journal Social Indicators Research
- Online ISSN 1573-0921
- Print ISSN 0303-8300