central america eeu sweden | Behavior ec.

Keeping up with the Vaishyas: Caste and relative standing

We investigate the importance of relative income within the Indian Caste system, using a choice experiment.

We find that slightly more than half of the marginal utility of income comes from some kind of relative income effects, on average, which is comparable to the results from previous studies in other countries. Belonging to a low caste and having a low family income are associated with higher concern for relative income. Moreover, an increase in the mean income of the caste to which the individual belongs, everything else held constant, reduces utility for the individual. Thus, the negative welfare effect of reduced relative income compared to the average own caste income dominates the positive welfare effect of increased relative income of the own caste relative to other castes.

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Centers

  • central america
  • eeu sweden

Type of publication

  • Peer reviewed

Reference

Carlsson, F. G. Gupta and O. Johansson-Stenman (2008) Keeping up with the Vaishyas: Caste and relative standing, Oxford Economic Papers 61(1):52-73

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