Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/214374 
Year of Publication: 
2006
Series/Report no.: 
CREMA Working Paper No. 2006-28
Publisher: 
Center for Research in Economics, Management and the Arts (CREMA), Basel
Abstract: 
Relative income differences are likely to lead to envy within a reference group. Envy in turn influences social behavior and on individual performance. While positional concerns are apparent in daily life, empirical evidence is rare in the economic literature. This paper investigates the impact of the relative income position on individuals' performance or productivity. As "performance" is difficult to measure we turn to soccer players whose performance has been well documented. The broad sample covers eight seasons of the German premier soccer league (Bundesliga) between 1995/1996 and 2003/2004, and includes 1040 players, a salary proxy and several performance variables. The results show that player performance is strongly affected by relative income position. A disadvantage in the relative income position reduces productivity. The larger the income differences within a team, the stronger are the effects of positional concern. Team composition also significantly affects behaviour.
Subjects: 
Relative income
positional concerns
envy
performance
income inequality
JEL: 
D00
D60
L83
Document Type: 
Working Paper

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