Scandinavian Working Papers in Economics

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

No 171: Keeping Up with the Vaishyas: Caste and Relative Standing

Fredrik Carlsson (), Gautam Gupta () and Olof Johansson-Stenman ()
Additional contact information
Fredrik Carlsson: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG
Gautam Gupta: Department of Economics, Jadavpur University, Postal: Kolkata-700 032, India.
Olof Johansson-Stenman: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG

Abstract: We investigate the importance of relative income within the Indian Caste system, using a choice experiment. We find that slightly more than half of the marginal utility of income comes from some kind of relative income effects, on average, which is comparable to the results from previous studies in other countries. Belonging to a low caste and having a low family income are associated with higher concern for relative income. Moreover, an increase in the mean income of the caste to which the individual belongs, everything else held constant, reduces utility for the individual. Thus, the negative welfare effect of reduced relative income compared to the average own caste income dominates the positive welfare effect of increased relative income of the own caste relative to other castes.

Keywords: Caste; India; relative income; positionality; status; questionnaire-experimental methods; random utility models; choice experiments

JEL-codes: C91; D63; H21

32 pages, August 17, 2005

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