Working Papers in Economics,
University of Gothenburg, Department of Economics

Abstract: This paper proposes that people derive utility not only from goods or their attributes as in standard models, but also from their self-image as influenced by their own perception of their preferences. In a representative survey, most respondents considered their own concern for status when purchasing a car to be minor in comparison with the status concerns of others. Similarly, most individuals considered themselves to be more environmentally concerned than other people. These results are consistent with an extension of the conventional theory where an individual’s selfimage is added as an argument in the utility function.

Keywords: Status; environmental concern; self-deception; self-image; preference falsification

JEL-codes: A13; D12

31 pages, August 9, 2004

Note: Published in Economic Behavior and Organization, 2006, Vol. 60, pp. 129-146.

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Published as

Olof Johansson-Stenman and Peter Martinsson, (2006), 'Honestly, why are you driving a BMW?', Economic Behavior and Organization, vol 60, pages 129-146

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