The positionality of goods and the positional concern’s origin

Abstract

This paper investigates what goods are positional, the degree of individuals’ positional concern, and their possible drivers for a sample of Uruguayan younger. The participants’ degree of positional concern is generated using a choice experimental approach. The study combines longitudinal information about participants’ perceptions of the visibility of the goods and their reference groups and randomized information treatments to prime participants into competing narratives regarding (i) the goods, (ii) gender, and (iii) sources of inequality in society. The main findings are: (1) the visibility of the goods would not be a necessary condition for their position: jewelry, cars, and health insurance are positional goods; (2) relative income matters, but less than relative consumption of these goods; (3) the positional concern is heterogeneous at the individuals level with a bimodal distribution: one group of individuals has a high prevalence of relative concern, while the other is positional-neutral; (4) there are no differences by gender, visibility perceptions and declared reference group; and (5) individuals are less likely to report positional concerns (and inequality aversion) when differences in income come from effort and inheritance.