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On distributional properties of household consumption expenditures: the case of Italy

Fagiolo, Giorgio, Alessi, Lucia, Barigozzi, Matteo and Capasso, Marco (2010) On distributional properties of household consumption expenditures: the case of Italy. Empirical Economics, 38 (3). pp. 717-741. ISSN 0377-7332

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Abstract

We present a model in which individuals' preferences are defined over their consumption, transfers to offspring, and social status associated with income. We show that a separating equilibrium exists where individuals' expenditure on conspicuous consumption is a signal for their unobserved income. In this equilibrium, poor families that climb up the social ladder by the accumulation of wealth engage in conspicuous consumption that prevents them from escaping poverty. Our model may explain why the poor make some choices that do not appear to help them escape poverty.

Item Type: Article
Official URL: http://www.springer.com/economics/journal/181
Additional Information: © 2010 Springer
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Sets: Departments > Statistics
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 06 Jan 2011 17:12
URL: http://eprints.lse.ac.uk/31114/

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