What motivates positional concerns for income?

Recent empirical work provides evidence that people take actions out of a concern for relative income standing, and recent theoretical work illustrates that more can be explained if we move beyond standard choice theory to recognize “positional income concerns”. However, because most income is derived from allocating time toward labor and away from leisure, any observed positional concern for income is potentially confounded with a positional concern for leisure. Our work addresses this potential confounding problem. Among our survey participants, we find “follower behavior” to be more prevalent when positional concerns for income and leisure can be confounded than when only a positional concern for income is possible. This implies that what we perceive as people trying to “keep up with the Jones' income” may also partly be an effort to keep up (or down) with the Jones' leisure. A positional concern for income was more likely exhibited by those who were younger, more competitive, non-Caucasian, less satisfied with how much they are accepted by others, more satisfied with their religious fulfillment, and by those who gambled more often.