Using the Chinese urban household survey data between 1997 and 2006, we find that income inequality has a negative (positive) impact on households' consumption (savings), even after we control for family income. We argue that people save to improve their social status when social status is...

We demonstrate that interpersonal comparisons lead to "keeping up with the Joneses"-behavior. Using annual household data from the German Socio-Economic Panel, we estimate the causal effect of changes in reference consumption, defined as the consumption level of all households who are perceived...

Using panel data on individual borrowing characteristics and neighborhood income, we assess the impact of relative income on indebtedness and payment delinquencies. We find that a worsening in relative income vis-à-vis similarly aged neighbors leads to higher indebtedness, primarily due to...

We demonstrate that upward-looking comparisons induce "keeping up with the richer Joneses"-behavior. Using data from the German Socio-Economic Panel, we estimate the effect of reference consumption, defined as the consumption level of all households who are perceived to be richer, on household...

In this paper we introduce price search decision to a life cycle model, and differentiate consumption from expenditure. The consumers with low wealth and bad income shocks search more and pay less which makes their consumption higher than a model without search option. A plausibly calibrated...

In this paper, we differentiate consumption from expenditure by incorporating price search decision into an otherwise standard life-cycle model. In our model, households can pay lower prices for the same consumption good if they allocate more time for price search. We first analytically show...

This article studies socially optimal allocations, from the point of view of a benevolent social planner, in environments characterized by fixed resources, endogenous fertility, and full information. Individuals in our environment are fully rational and altruistic toward their descendants. Our...