erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

Attitude Choice, Economic Change, and Welfare

Yew-Kwang Ng (Monash University, Australia)
Jianguo Wang (National University of Singapore)

Abstract  

As supported by commonsense and substantial evidence (discussed in section 1 and 2), one’s attitude toward wealth may affect utility and people can, at least to some extent and some costs, choice their attitudes. Using a very simple model of attitude choice (section 3) and analysing the comparative-static effects of some economic changes (section 4) , this paper shows that individuals with high/low incomes tend to adopt an attitude emphasising the importance of material consumption more/less. Economic growth unambiguously increase the utility of the rich (unless the generation of growth itself is too costly) by increasing both their income and prevailing materialistic attitude. It has an ambiguous effect on the poor as it makes them better off through a higher income level but worse off through a higher prevailing materialistic attitude.

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