Prevailing economic models of consumer behavior completely ignore the well-documented link between context and evaluation. We propose and test a theory that explicitly incorporates this link. Changes in one group's spending shift the frame of reference that defines consumption standards for...

This chapter was prepared for Elsevier's Handbook of Social Economics (edited by Jess Benhabib, Alberto Bisin, and Matthew Jackson). It brings together some of the recent empirical and experimental evidence regarding preferences for social status. While briefly reviewing evidence from different...

We show that large-scale debt-financed public infrastructure spending, in addition to (a) generating growth and employment on a similarly large scale and (b) significantly reducing inefficiency-generated public and private costs economy-wide, will also (c) be substantially “self-financing”...

The philosopher Bernard Williams describes an example in which a botanist wanders into a village in the jungle where ten innocent people are about to be shot. He is told that nine of them will be spared if he himself will shoot the tenth. What should the botanist do? Although most people would...

Current estimates of regulatory benefits are too low, and likely far too low, because they ignore a central point about valuation - namely, that people care not only about their absolute economic position, but also about their relative economic position. We show that where the government...

I WANT TO BEGIN BY OFFERING MY SINCERE THANKS TO Andrew Kashdan and Daniel Klein for their spirited critique of my work. They have read me carefully and raised many important questions. But before responding to them in detail, I want to say something about what they perceive as my shortage of...