Who cares about relative status? A quantile approach to consumption of relative house size

I estimate the willingness to pay (WTP) to live in a house near neighbours with relatively smaller (or larger) houses using housing transaction data. I find that consumers in the 50^th and 75^th percentile are willing to pay the most for an increase in relative housing consumption while consumers in the lower percentiles and the highest percentile yield a smaller, and statistically insignificant, WTP. This gives evidence to popular media reports that the middle class values relative status the most.     

The Influence of Reference Group House Size on House Price

This article examines the effect of a change in housing consumption of various reference groups on predicted own house price. I employ a spatial autoregressive model and find that an increase in average house size of the eight nearest neighbors and the largest houses in the district has a negative effect on predicted house price, whereas the effect of an increase in average house size of the further neighbors (9th through 16th neighbors) and the smallest houses in the district on predicted house price is positive. This suggests that the “envy effect” dominates with respect to the nearest and largest neighbors, whereas the “basking in the reflected glory” effect dominates with respect to the further smallest neighbors.     

Inflation volatility and economic growth in Bolivia: a regional analysis

This paper analyses the effects of inflation and its volatility on Gross Domestic Product (GDP) per capita for the regions of Bolivia over the period 1989–2011. Results show the existence of a positive relationship with inflation but a negative one with respect to volatility. Moreover, we identify a threshold for volatility and inflation. Our conclusions imply that economic agents are more tolerant to relatively high levels of inflation than to high inflation volatility.     

PARTY CUES,POLITICAL TRENDS,AND FISCAL INTERACTIONS IN THE UNITED STATES

Recent theoretical and empirical research has suggested that similarities in party affiliations across space will alter voters' comparisons, thus influencing fiscal policy mimicking. We employ a two‐regime spatial panel data model applied to U.S. state governors from 1970 to 2012, and find rather weak empirical evidence of influence of political party affiliations in fiscal yardstick competition. Our observed cross‐state interdependence in fiscal policies suggests voters may not weigh party affiliation heavily in their measure of comparative quality, treating each incumbent individually and independently. Incumbents strategically choose policy accordingly. This provides indirect support for the median voter theorem, in which incumbents' objective function is to maximize votes, independent of political affiliation. (JEL D72, H2, H7)     

Revealed preference for relative status: Evidence from the housing market

This paper investigates the value individuals place on their relative housing consumption as compared to absolute housing consumption. Using observed housing sales from three Ohio MSAs in 2000, a spatial Durbin hedonic price model provides total marginal willingness-to-pay estimates for both characteristics of housing units and those of its neighbors. Using this revealed-preference approach, we find evidence suggesting individuals do value relative house size, but the absolute effect dominates. For instance, the estimates indicate that if all homes in Columbus were to increase in size by 100 square feet, the net effect of impacts on absolute and relative consumption would be to increase house prices by $605 on average. This stands in contrast to the stated preference literature, which frequently find individuals to be willing to forgo absolute well-being in exchange for relative status gains.     

The influence of gay and lesbian coupled households on house prices in conservative and liberal neighborhoods

Gays and lesbians perceive themselves to be targets of discrimination in the housing market. Previous research has found that the presence of gays and lesbians is associated with increased housing values. We reconcile the perceived discrimination and research results by classifying neighborhoods as more conservative or liberal according to voting outcomes of the “Defense Of Marriage Act”. Using a data set comprised of over 20,000 house sale observations, we show that an increase in the number of same-sex coupled households is associated with an increase in house prices in more liberal neighborhoods and a decrease in house prices in more conservative neighborhoods. This suggests that gay and lesbian coupled households do experience prejudice in conservative neighborhoods.     

Health insurance subsidies and the expansion of an implicit marriage penalty: a regional comparison of various means-tested programmes

Any subsidy provision for healthcare premiums, including those embedded in Affordable Care Act (ACA), has the potential to result in some couples facing an implicit penalty when married relative to unmarried. To illustrate such consequences of means-tested subsidies of health insurance premiums, we construct hypothetical households earning different levels of income who are eligible for current subsidies in the USA. and compare the estimated implicit marriage penalty faced by these households to the one faced by low-income households who are eligible for various means-tested programmes (e.g. TANF, WIC, SNAP) for each of the 48 contiguous states. We find that, like very low-income households, marriage can potentially penalize couples who receive health insurance premium subsidies by decreasing their overall disposable income by as much as 14%. We find that the ACA increases the number of households subject to marriage penalties embedded in means-tested programmes for low-income couples. This distortion will exist for any future health insurance premium subsidies that are means tested at the household income level.