Veblen goods and neighbourhoods: endogenising consumption reference groups

One of the significant developments in the last four decades of economics is the growing empirical evidence that individual consumption preferences, as mea- sured by self-reported life satisfaction, are neither fixed nor self-centred but are instead overwhelmingly dominated by externalities, partly in the form of reference levels set by others and by one’s own experience. Welfare analysis recognising this fact is likely to indicate enormous revisions for macroeconomic policy and social objectives as well as for what is taught in economics at all levels. Yet the task of constructing general equilibrium models based on this microeconomic re- ality is still in its infancy. In this work I take the conventional stance that decision makers understand their own utility function. Therefore, they can choose the mi- lieu in which they immerse themselves with the sophisticated understanding that it will affect their own consumption reference levels and therefore the degree of satisfaction they derive from their private consumption. At the same time, their private consumption will help to set the reference level for others in their chosen group. I treat theoretically the problem of such endogenous formation of consump- tion reference groups in the context of a simultaneous choice of neighbourhoods and home consumption amongst a heterogenous population. For both discrete and continuous distributions of types, I find general equilibrium outcomes in which differentiation of neighbourhoods occurs endogenously and I compare the welfare implications of growth in such economies.reference income; veblen goods; consumption reference groups; club goods

Well-being Inequality and Reference Groups: An Agenda for New Research

In this paper it is argued that subjective well-being of the individual depends on two types of variables. The first type consists of characteristics of the individual himself, such as age, health, income, etc. The second type of variables consists of the characteristics of the individuals belonging to his reference group. The vast literature about happiness, quality of life, and well-being informs us extensively about the effects of objective variables. How the second type affects well-being is much less investigated. It is argued that the concept of well-being inequality cannot be properly defined without taking the referencing process into account. The reference effect depends on how frequently individuals compare with others and on the degree of social transparency in society. We attempt to give a structural embedding of the idea of reference groups in SWB-models. In this paper we employ the reference-extended model for incorporating in happiness studies the concept of inequality in happiness or SWB. Finally, we plead for an extension of the present happiness paradigm by setting up a new additional agenda for empirical research in order to get quantified knowledge about the referencing process. As a first step we suggest a new question module to be included in new survey questionnaires.subjective well-being, happiness, inequality, reference group

The Selection of Pay Referents: Potential Patterns and Impacts on Life Satisfaction

Despite the relatively extensive research on pay levels and the consequences of income disparities, little is known about which reference groups people choose for comparative evaluation of personal income and why different selection patterns emerge. The aim of this paper is to dig deeper for answers to the following three questions: (1) What are the most important reference groups for income comparisons? (2) Who tends to use which type of reference group? (3) Which reference groupsare most detrimental to life satisfaction? The analysis is based on data from the 2008 and 2009 pretest modules of the Socio-Economic Panel Study (SOEP). The results show the working sphere (colleagues and members of the same profession) to be the most important point of reference for income comparisons, whereas neighbors are the least important. No clear-cut picture emerges for the differential selection of reference groups. Structural characteristics - e.g., level of income, education, and type of employment - are of only minor importance in the selection of reference groups for income comparisons. The results also suggest that individuals are likely to select those reference groups whose income is closest to their own. Therefore, the level of income relative to a reference group is related to the relevance of that group in income comparisons. The consequences of such comparisons for life satisfaction prove to be negative: the more importance an individual attaches to income comparisons with reference groups, the lower his or her life satisfaction. Income relative to neighbors and colleagues only affected life satisfaction when the respondent perceived such reference groups to be relevant in income comparisons. These results challenge previous research suggesting that people are unconscious of the true impact of comparison processes. Nevertheless, the results point to various difficulties in the measurement of social comparison processes andshow personal predispositions to be a major factor influencing such comparisons. The results strongly indicate the need for advanced instruments to measure the cognitive processes underlying social comparisons.Income comparisons, relative income, reference groups, satisfaction, well-being

Recent Progress in the Symmetric Generation of Groups

Many groups possess highly symmetric generating sets that are naturally endowed with an underlying combinatorial structure. Such generating sets can prove to be extremely useful both theoretically in providing new existence proofs for groups and practically by providing succinct means of representing group elements. We give a survey of results obtained in the study of these symmetric generating sets. In keeping with earlier surveys on this matter, we emphasize the sporadic simple groups. ADDENDUM: This is an updated version of a survey article originally accepted for inclusion in the proceedings of the 2009 `Groups St Andrews' conference. Since the article was accepted the author has become aware of other recent work in the subject that we incorporate to provide an updated version here (the most notable addition being the contents of Section 3.4.)Comment: 14 pages, 1 figure, an updated version of a survey article accepted for the proceedings of the 2009 "Groups St Andrews" conference. v2 adds McLaughlin reference and abelian groups reference

Relative deprivation, reference groups and the assessment of standard of living

This paper proposes two new indices of relative deprivation, derived from an extension of the concept of the generalized Gini for the measurement of distributional change. Population- and income-weighted relative deprivation indices are then defined and, using panel data from the Consortium of Household Panels for European Socio-Economic Research, this paper checks which of the various ways of defining individual deprivation best fits the answers given by individuals on the degree of their satisfaction with income. The analysis finds that the deprivation indices proposed are consistently and negatively correlated with income satisfaction as reported by respondents, that income weighted measures fit better than population weighted measures, and that this fit improves with countries that experienced deep institutional changes such as the transitional economies of Eastern Europe.Inequality,Economic Theory&Research,Poverty Impact Evaluation,Labor Policies,Emerging Markets

A Curse of Comparison? Evidence on Reference Groups for Relative Income Concerns

This paper proposes that individuals care about the relative income of proximate reference groups. Making use of self-reported life satisfaction as a proxy for unobservable utility, the relative income of siblings is tested for relevance as a reference point for new sample data from Venezuela. Having greater perceived income than one's siblings is found to be positively linked to individual life satisfaction. This evidence supplements the scarce economic research on reference groups, supporting the hypothesis that individuals with proximate characteristics and resembling opportunities in life serve as points of comparison.reference groups; relative income; life satisfaction

The effect of spatial learning on the number of astrocytes in rat dentate gyrus

In this study, we evaluated the effect of spatial learning on the number of astrocytes in the rat dentate gyrus with Morris water maze. Fifteen male albino Wistar rats were divided into three groups as control, reference memory and working memory groups. Each group was consisted of 5 rats. After spatial learning, the brains were histologically examined; the slides were stained with phosphotungstic acid hematoxylin (PTAH) staining to show the astrocytes. We found significant difference in the number of astrocytes in dentate gyrus between control and reference memory groups, and between control and working memory groups as well. When compared two learning groups there was a significant difference in the number of astrocytes between them, being higher in the working memory group. We concluded that the number of astrocytes increased due to spatial learning and this increase can be affected to the period of learning. Our studies of spatial learning and effect of learning techniques (reference and working memory) showed that the technique that has longer period of learning has more effect on the number of astrocytes

Continuous groups of transversal gates for quantum error correcting codes from finite clock reference frames

Following the introduction of the task of reference frame error correction, we show how, by using reference frame alignment with clocks, one can add a continuous Abelian group of transversal logical gates to any error-correcting code. With this we further explore a way of circumventing the no-go theorem of Eastin and Knill, which states that if local errors are correctable, the group of transversal gates must be of finite order. We are able to do this by introducing a small error on the decoding procedure that decreases with the dimension of the frames used. Furthermore, we show that there is a direct relationship between how small this error can be and how accurate quantum clocks can be: the more accurate the clock, the smaller the error; and the no-go theorem would be violated if time could be measured perfectly in quantum mechanics. The asymptotic scaling of the error is studied under a number of scenarios of reference frames and error models. The scheme is also extended to errors at unknown locations, and we show how to achieve this by simple majority voting related error correction schemes on the reference frames. In the Outlook, we discuss our results in relation to the AdS/CFT correspondence and the Page-Wooters mechanism.Comment: 10+35 pages. Also see related work uploaded to the arXiv on the same day; arXiv:1902.0771