How Much Will People Pay for Status?

Abstract

Peoples' concerns for status may raise problems for traditional economic models. For example, concern for status leads people to have interdependent preferences. Recent empirical work has been done to determine the scope and magnitude of this concern with regard to income. This paper builds on these recent empirical findings. Using a survey, this paper shows that status-driven concerns for income are abundant and vary over a wide range. Based on information supplied by participants, women showed more concern for status than men. Family income and future expectations also were significant in an ordered probit regression.