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Social Preferences, Social Status and Economic Inequality
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2014 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Studying individuals’ preferences and behavioral incentives is of great importance regarding the design of effective public policy. For the analysis of such preferences to be close to reality, the consideration of the “social factor” is required, i.e. the impact that the social milieu has on individuals’ beliefs and behavior. In this context, the objective of this study is to identify the mechanisms through which subjective social status and economic inequality influence the formation of individuals’ preferences and motives, specifically associated with self-interest and altruism. Subjective social status is defined as individuals’ perception of the social structure and their place in it, while income inequality is described by both subjective –attitudes towards inequality- and objective -Gini index- measures. The analysis is based on the datasets of the ISSP “Social Inequality” module, covering five “western”, developed countries in 1987, 1992 and 2009. Ordered probit and instrumental variable specifications, where measures of inequality serve as instruments accounting for the variation in subjective social status, are estimated. Factor analysis is also implemented for the case where self- interest and altruism are treated as the boundaries of a common “behavioral motivation” axis. The results yielded by the different approaches are compared and discussed under the scope of the social interactions theory. Subjective social status is found to be indicative of whether self- or other- regarding preferences are prevailing in individuals’ system of values and beliefs, self- categorizing in higher social classes increasing the probability of being driven by self- centered preferences.

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Keyword [en]
economic inequality, Gini index, social status, preferences, self- interest, altruism
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URN: urn:nbn:se:uu:diva-226207OAI: oai:DiVA.org:uu-226207DiVA: diva2:724660
Available from: 2014-06-13 Created: 2014-06-13 Last updated: 2014-06-13Bibliographically approved

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