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Conspicuous consumption and satisfaction

Type of publication Peer-reviewed
Publikationsform Original article (peer-reviewed)
Publication date 2012
Author Winkelmann Rainer,
Project SWISS HOUSEHOLD PANEL - 2012 - 2013
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Original article (peer-reviewed)

Journal Journal of Economic Psychology
Volume (Issue) 33(1)
Page(s) 183 - 191
Title of proceedings Journal of Economic Psychology

Abstract

Traditional tools of welfare economics identify the envy-related welfare loss from conspicuous consumption only under very strong assumptions. Measured income and life satisfaction offers an alternative for estimating such consumption externalities. The approach is developed in the context of luxury car consumption (Ferraris and Porsches) in Switzerland. Results from household panel data and fixed effects panel regressions suggest that the prevalence of luxury cars in the municipality of residence has a negative impact on own income satisfaction.
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