Keeping up with the Joneses: the Relevance of Duesenberry’s Relative Income Hypothesis in Ethiopia

2020 ◽  
Author(s):  
Tazeb Bisset ◽  
Dagmawe Tenaw
Keyword(s):  
Low Income ◽  
Aggregate Demand ◽  
Relative Income ◽  
Lower Income ◽  
Ratchet Effect ◽  
Demonstration Effect ◽  
Consumption Decisions ◽  
Distributed Lag ◽  
Relative Income Hypothesis ◽  
Ratchet Effects

Abstract Although it was mysteriously neglected and displaced by the mainstream consumption theories, the Duesenberry’s relative income hypothesis seems quite relevant to the modern societies where individuals are increasingly obsessed with their social status. Accordingly, this study aims to investigate the relevance of Duesenberry’s demonstration and ratchet effects in Ethiopia using a quarterly data from 1999/2000Q1-2018/19Q4. To this end, two specifications of relative income hypothesis are estimated using Autoregressive Distributed Lag (ARDL) regression model. The results confirm a backward-J shaped demonstration effect. This implies that an increase in relative income induces a steeper reduction in Average Propensity to consume (APC) at lower income groups (the demonstration effect is stronger for lower income households). The results also support the ratchet effect, indicating the importance of past consumption habits for current consumption decisions. In resolving the consumption puzzle, the presence of demonstration and ratchet effects reflects a stable APC in the long-run. Hence, consumption-related policies should be carefully designed as polices aimed at boosting aggregate demand can motivate low income households to gallop into wasteful competition so as to ‘keep up with the Joneses’—the relative riches.

scholarly journals An Empirical Examination of Relative Income Hypothesis: Evidence from Pakistan

2021 ◽  
Vol 13 (1) ◽  
pp. 1-18
Author(s):  
Mehr u Nisa Ishtiaq ◽  
Tahira Tauheed ◽  
Isma Ishtiaq
Keyword(s):  
National Level ◽  
Relative Income ◽  
Least Square ◽  
Likelihood Method ◽  
Ratchet Effect ◽  
Empirical Examination ◽  
Long Run ◽  
Relative Income Hypothesis ◽  
The Impact ◽  
Ratchet Effects

The present study empirically investigates the relevance of the various specifications of relative Income hypothesis (RIH) in the case of Pakistan. World Development Indicators’ data is analyzed over the period of 1986 to 2016. This study tests the existence of income, consumption, and habit ratchet effects at the National level. Based on stationarity tests the techniques of Box Jenkin, Two Stage Least Square, Generalized Methods of Moments, and Limited Information Maximum Likelihood Method are utilized to estimate the four versions of relative income hypothesis. Findings of this research validate the significant prevalence of three types of ratchet effects in case of Pakistan. In Duesenberry-Eckstein-Formm (DEF) model, habit ratchet effect is found to be stronger than income ratchet effect. Whereas in modified Davis model Consumption ratchet effect exceeds the habit ratchet effect. It is observed that long run marginal propensities to consume are closer to one which demonstrates smooth consumption behavior over long period in Pakistan. The estimated short run marginal propensities to consume are observed to be less than long run marginal propensities to consume that accords with the existing consumption theory. These findings imply that all ratchet effects put pressure upon consumers to maintain the highest standard of living enjoyed in the past. In this process households do not retain balance between savings and consumption. Based on these findings, it is suggested to consider the impact of societal factor in formulating policies to shape the consumption patterns.

Superstar Cities

2013 ◽  
Vol 5 (4) ◽  
pp. 167-199 ◽  
Author(s):  
Joseph Gyourko ◽  
Christopher Mayer ◽  
Todd Sinai
Keyword(s):  
Metropolitan Area ◽  
Metropolitan Areas ◽  
House Prices ◽  
Aggregate Demand ◽  
House Price ◽  
Lower Income ◽  
Local Factors ◽  
The Past ◽  
Long Run ◽  
Price Appreciation

We document large long-run differences in average house price appreciation across metropolitan areas over the past 50 years, and show they can be explained by an inelastic supply of land in some unique locations combined with an increasing number of highincome households nationally. The resulting high house prices and price-to-rent ratios in those “superstar” areas crowd out lower income households. The same forces generate a similar pattern among municipalities within a metropolitan area. These facts suggest that disparate local house price and income trends can be driven by aggregate demand, not just changes in local factors such as productivity or amenities. (JEL R11, R23, R31, R52)

scholarly journals Nature inequity and higher COVID-19 case rates in less-green neighbourhoods in the United States

2021 ◽  
Author(s):  
Erica N. Spotswood ◽  
Matthew Benjamin ◽  
Lauren Stoneburner ◽  
Megan M. Wheeler ◽  
Erin E. Beller ◽  
...  
Keyword(s):  
United States ◽  
Low Income ◽  
Vegetation Index ◽  
Normalized Difference Vegetation Index ◽  
The United States ◽  
Incidence Rates ◽  
Lower Income ◽  
Urban Nature ◽  
Urbanized Areas ◽  
Block Groups

AbstractUrban nature—such as greenness and parks—can alleviate distress and provide space for safe recreation during the COVID-19 pandemic. However, nature is often less available in low-income populations and communities of colour—the same communities hardest hit by COVID-19. In analyses of two datasets, we quantified inequity in greenness and park proximity across all urbanized areas in the United States and linked greenness and park access to COVID-19 case rates for ZIP codes in 17 states. Areas with majority persons of colour had both higher case rates and less greenness. Furthermore, when controlling for sociodemographic variables, an increase of 0.1 in the Normalized Difference Vegetation Index was associated with a 4.1% decrease in COVID-19 incidence rates (95% confidence interval: 0.9–6.8%). Across the United States, block groups with lower income and majority persons of colour are less green and have fewer parks. Our results demonstrate that the communities most impacted by COVID-19 also have the least nature nearby. Given that urban nature is associated with both human health and biodiversity, these results have far-reaching implications both during and beyond the pandemic.

The Aspirational Income Hypothesis: On the Limits of the Relative Income Hypothesis

2020 ◽  
Author(s):  
Elias Khalil ◽  
Jason Anthony Aimone ◽  
Daniel Houser ◽  
Siyu Wang ◽  
Deborah Martinez Villarreal ◽  
...  
Keyword(s):  
Relative Income ◽  
Relative Income Hypothesis

scholarly journals Vulnerability of Renters and Low-Income Households to Storm Damage: Evidence From Hurricane Maria in Puerto Rico

2020 ◽  
Vol 110 (2) ◽  
pp. 196-202
Author(s):  
Chenyi Ma ◽  
Tony Smith
Keyword(s):  
Low Income ◽  
Disaster Preparedness ◽  
Housing Tenure ◽  
Lower Income ◽  
Storm Damage ◽  
Income Levels ◽  
Household Level ◽  
Relative Risks ◽  
The Individual ◽  
Inspection Data

Objectives. To identify disparities in home damage from Hurricane Maria among Puerto Rican households with different housing tenure and income levels. Methods. Using household inspection data obtained by the Federal Emergency Management Agency (FEMA), including an ordinal damage severity measure, we used generalized ordered logistic regression to estimate the relative risks of damage severities between renters and homeowners, and between households with different incomes. Results. With respect to the FEMA damage-severity classifications of “minor,” “major,” and “destroyed,” renters were more at risk than homeowners for both “major-or-destroyed” and “destroyed” outcomes. Similarly, lower-income households were at greater risk for both “major-or-destroyed” and “destroyed” outcomes. When we allowed for an interaction between income and housing tenure, the difference in risk of “destroyed” outcomes between renters and homeowners was substantially greater at lower income levels. Conclusions. These results provide evidence at the individual household level that renters and lower-income households are most vulnerable to hurricane damage. Our interaction results suggest that lower-income renters are particularly vulnerable to severe home damage. Public Health Implications. Disaster preparedness policies should raise structural standards for low-income housing to reduce risks of severe damage.

scholarly journals Examining building age, rental housing and price filtering for affordability in Melbourne, Australia

Urban Studies ◽  
2020 ◽  
pp. 004209802092783
Author(s):  
Matthew Palm ◽  
Katrina Eve Raynor ◽  
Georgia Warren-Myers
Keyword(s):  
Affordable Housing ◽  
Low Income ◽  
Government Expenditure ◽  
Rental Housing ◽  
Housing Affordability ◽  
Supply Side ◽  
Lower Income ◽  
Naturally Occurring ◽  
1960S And 1970S ◽  
The 1960S

Governments worldwide have responded to housing affordability challenges with supply-side solutions. Proponents of these approaches often draw on the notion of ‘filtering effects’ to argue that new supply naturally trickles down to lower-income households over time, improving affordability. This study examines the characteristics of Naturally Occurring Affordable Housing in Melbourne, Australia, analysing how dwelling age impacts rental cost. We specify a non-linear relationship between building age and rents through hedonic rent modelling, reflecting a premium for historic properties in inner Melbourne. We also conduct a cluster analysis of rental listings and measure affordability by cluster. Our results problematise the notion of filtering, finding that most contemporary affordable housing was initially built in the 1960s and 1970s as social housing or targeted at low-income households. We argue that filtering in this instance is not natural but is instead a reflection of historic government expenditure and past construction choices, or ‘filter up’.

After the Projects

2018 ◽  
Author(s):  
Lawrence J. Vale
Keyword(s):  
Public Housing ◽  
New Orleans ◽  
San Francisco ◽  
Low Income ◽  
Rental Housing ◽  
Hope Vi ◽  
Lower Income ◽  
Spatial Politics ◽  
The Us ◽  
National Initiative

At a time when lower-income Americans face a desperate struggle to find affordable rental housing in many cities, After the Projects investigates the contested spatial politics of public housing development and redevelopment. Public housing practices differ markedly from city to city and, collectively, reveal deeply held American attitudes about poverty and how the poorest should be governed. The book exposes the range of outcomes from the US federal government’s HOPE VI program for public housing transformation, focused on nuanced accounts of four very different ways of implementing this same national initiative—in Boston, New Orleans, Tucson, and San Francisco. It draws upon more than two hundred interviews, analysis of internal documents about each project, and nearly fifteen years of visits to these neighborhoods. The central aim is to understand how and why some cities, when redeveloping public housing, have attempted to minimize the presence of the poorest residents in their new mixed-income communities, while other cities have instead tried to serve the maximum number of extremely low-income households. The book shows that these socially and politically revealing decisions are rooted in distinctly different kinds of governance constellations—each yielding quite different sorts of community pressures. These have been forged over many decades in response to each city’s own struggle with previous efforts at urban renewal. In contrast to other books that have focused on housing in a single city, this volume offers comparative analysis and a national picture, while also discussing four emblematic communities with an unprecedented level of detail.

Confined Shopping Behavior among Low Income Consumers: An Empirical Test

1978 ◽  
Vol 15 (1) ◽  
pp. 11-19 ◽  
Author(s):  
Arieh Goldman
Keyword(s):  
Low Income ◽  
Empirical Test ◽  
Main Tool ◽  
Shopping Behavior ◽  
Small Subset ◽  
Lower Income ◽  
Herfindahl Index ◽  
Low Income Consumers

The study investigates whether lower income consumers show a greater tendency to confine their furniture and ladies’ shoes purchases to a subset of the retailing system. The Herfindahl index of concentration is the main tool used to measure confinement. The study finds that the lower income consumers do not confine their purchases to a small subset nor are their purchases restricted to the smaller and lower quality stores.

scholarly journals Analysis of the Implementation of Telehealth Visits for Care of Patients With Cancer in Houston During the COVID-19 Pandemic

2020 ◽  
pp. OP.20.00572
Author(s):  
Jorge G. Darcourt ◽  
Kalia Aparicio ◽  
Phillip M. Dorsey ◽  
Joe E. Ensor ◽  
Eva M. Zsigmond ◽  
...  
Keyword(s):  
Quality Of Care ◽  
Low Income ◽  
Clinical Findings ◽  
Medical Data ◽  
Medical Liability ◽  
Lower Income ◽  
Demographic Information ◽  
Patients With Cancer ◽  
Patient Interactions

PURPOSE: The purpose of this study was to evaluate the use of telemedicine amid the SARS-CoV-2 pandemic in patients with cancer and assess barriers to its implementation. PATIENTS AND METHODS: Telehealth video visits, using the Houston Methodist MyChart platform, were offered to patients with cancer as an alternative to in-person visits. Reasons given by patients who declined to use video visits were documented, and demographic information was collected from all patients. Surveys were used to assess the levels of satisfaction of treating physicians and patients who agreed to video visits. RESULTS: Of 1,762 patients with cancer who were offered telehealth video visits, 1,477 (83.8%) participated. The patients who declined participation were older (67.7 v 60.2 years; P < .0001), lived in significantly lower-income areas ( P = .0021), and were less likely to have commercial insurance ( P < .0001) than patients who participated. Most participating patients (92.6%) were satisfied with telehealth video visits. A majority of physicians (65.2%) were also satisfied with its use, and 74% indicated that they would likely use telemedicine in the future. Primary concerns that physicians had in using this technology were inadequate patient interactions and acquisition of medical data, increased potential for missing significant clinical findings, decreased quality of care, and potential medical liability. CONCLUSION: Oncology/hematology patients and their physicians expressed high levels of satisfaction with the use of telehealth video visits. Despite recent advances in technology, there are still opportunities to improve the equal implementation of telemedicine for the medical care of vulnerable older, low-income, and underinsured patient populations.

scholarly journals Do Latino and non-Latino grocery stores differ in the availability and affordability of healthy food items in a low-income, metropolitan region?

2011 ◽  
Vol 15 (2) ◽  
pp. 360-369 ◽  
Author(s):  
Jennifer A Emond ◽  
Hala N Madanat ◽  
Guadalupe X Ayala
Keyword(s):  
Low Income ◽  
Fresh Produce ◽  
Meat Products ◽  
Metropolitan Region ◽  
Grocery Stores ◽  
Lower Income ◽  
Cross Sectional ◽  
Food Items ◽  
Item Price ◽  
The Cost

AbstractObjectiveTo compare non-ethnically based supermarkets and Latino grocery stores (tiendas) in a lower-income region with regard to the availability, quality and cost of several healthy v. unhealthy food items.DesignA cross-sectional study conducted by three independent observers to audit twenty-five grocery stores identified as the main source of groceries for 80 % of Latino families enrolled in a childhood obesity study. Stores were classified as supermarkets and tiendas on the basis of key characteristics.SettingSouth San Diego County.SubjectsTen tiendas and fifteen supermarkets.ResultsTiendas were smaller than supermarkets (five v. twelve aisles, P = 0·003). Availability of fresh produce did not differ by store type; quality differed for one fruit item. Price per unit (pound or piece) was lower in tiendas for most fresh produce. The cost of meeting the US Department of Agriculture's recommended weekly servings of produce based on an 8368 kJ (2000 kcal)/d diet was $US 3·00 lower in tiendas compared with supermarkets (P < 0·001). The cost of 1 gallon of skimmed milk was significantly higher in tiendas ($US 3·29 v. $US 2·69; P = 0·005) and lean (7 % fat) ground beef was available in only one tienda (10 %) compared with ten (67 %) supermarkets (P = 0·01).ConclusionsBarriers remain in the ability to purchase healthier dairy and meat options in tiendas; the same is not true for produce. These results highlight the potential that tiendas have in improving access to quality, fresh produce within lower-income communities. However, efforts are needed to increase the access and affordability of healthy dairy and meat products.

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