236
Views
4
CrossRef citations to date
0
Altmetric
Original Articles

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

 

ABSTRACT

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 50th and 75th 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.

JEL CLASSIFICATION:

Notes

1 There is also evidence that consumers in the highest income brackets favour status symbols that are recognizable only to other high consuming individuals (i.e. expensive purses without obvious name labels) (Han, Nunes, and Dreze Citation2010).

2 The samples used to calculate include to ensure the spatial lag is based on actual neighbours in the original sample, not the bootstrap sample.

3 Calculated variables are taken following Leguizamon (Citation2010) and Leguizamon and Ross (Citation2012).

4 WTP is calculated by where is the variable coefficient of interest, is the spatial influence of the nearest neighbours’ house price and is the average house price.

Reprints and Corporate Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

To request a reprint or corporate permissions for this article, please click on the relevant link below:

Academic Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

Obtain permissions instantly via Rightslink by clicking on the button below:

If you are unable to obtain permissions via Rightslink, please complete and submit this Permissions form. For more information, please visit our Permissions help page.