Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/196913 
Year of Publication: 
2019
Series/Report no.: 
University of Tübingen Working Papers in Economics and Finance No. 118
Publisher: 
University of Tübingen, Faculty of Economics and Social Sciences, Tübingen
Abstract: 
This paper tracks the consequences of individuals' desire to align their location with their social preferences. The social preference studied in the paper is distaste for relative deprivation, measured in a cardinal manner. Location is conceived as social space, with individuals choosing to relocate if, as a result, their relative deprivation will be reduced, holding their incomes constant. Conditions are provided under which the associated dynamics reaches a spatial steady state, the number of periods it takes to reach a steady state is specified, and light is shed on the robustness of the steady state outcome. By way of simulation it is shown that for large populations, a steady state of the relocation dynamics is almost always reached, typically in one period, and that cycles are more likely to occur when the populations' income distributions are more equal.
Subjects: 
Social preferences
Distaste for low relative income
A cardinal measure of income relative deprivation
Interregional locational choices
Relocation dynamics
Steady-state spatial distribution
JEL: 
C62
C63
R12
R13
Z13
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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