US Neighbourhood Inequality

Type Research Project

Funding Bodies
  • Macroeconomic Policy Institute

Duration Dec. 1, 2014 - Oct. 31, 2016

  • Department of Economics (Crespo Cuaresma) AE (Details)
  • Economics of Inequality FI (Details)


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Abstract (English)

The relative income hypothesis predicts an increase in household consumption, labor supply, and credit demand in an environment of rising income inequality, due to households' attempts to ``keep up with the Joneses''. However, the empirical evidence on the behavioral consequences of inequality is limited. A major shortcoming in the empirical literature is the lack of regional disaggregation.
This project involves an investigation of (changes in) inequality in the US at different spatial scales. We analyze if households in counties with rising inequality increased their debt-to-income ratios stronger than households in counties where the income distribution remained more stable. With this research project we thus aim at testing some of the predictions of the relative income hypothesis, and improving the methodology for assessing the behavioral consequences of inequality.


Paper presented at an academic conference or symposium

2014 Moser, Mathias. 2014. Are unequal communities more polluted? A spatial analysis of neighborhood inequality and industrial air pollution in the US. FMM Conference, Berlin, Deutschland, 28.10.-30.10.. (Details)