Keeping up with the Joneses: Who loses out?

- Labour supply and well-being if consumers value consumption relative to their peers.
- Individuals over-supply labour.
- Some induced to work who otherwise would not.
- For these well-being is a decreasing function of wage rates.
- The worst-off are not those with lowest wage rates.

When individuals compare themselves to those with the same wage-rate, status concerns-Keeping up with the Joneses-lead individuals to work who otherwise would have chosen not to, and, for them, well-being is a decreasing function of the wage rate.