Projects

Querverteilung und Spitzeneinkommen in Deutschland . joint work with Moritz Drechsel-Grau (University of Mannheim) and Andreas Peichl (ZEW Mannheim) . herdentrieb-artcile

This analysis illustrates the relevance of top incomes and capital income for the evolution of income inequality in Germany. While there is no doubt that missing observations at the top of the income distribution leads to underestimation of the level of inequality, we show that depending on the quality of macroeconomic shocks, also assessments of the development of inequality can be heavily biased. Hence, inequality analyses should not solely focus on survey data but also consider administrative data.

Upward-looking status comparisons in consumption of U.S. households . joint work with Moritz Drechsel-Grau (University of Mannheim) . presentation-IAAE-2015

In this paper we test for the existence of upward-looking comparisons in the consumption of U.S. households and estimate the size of such effects. Next to a stratification along socio-demographic and geographic dimensions we construct comparison groups to comprise households from consumption deciles above the household’s own consumption class. Our analysis exploits rich data from the PSID allowing us to address the various sources of upward-bias due to endogeneity issues. Our results confirm one of the core implications of the literature on relative economic standing and well-being that comparisons are mostly directed upwards. Further, the effects are of economically relevant size. Such effects bear major implications for the transmission of distributional shocks into the economy as a meanpreserving spread of the income distribution will in uence aggregate consumption due to the attempts of middle and lower class households to keep up with the consumption expenditures of the rich.