Education as a Positional Good: A Life Satisfaction Approach

• Published in: Social indicators research Vol. 103; no. 3; pp. 409 - 426
• Main Authors: del Mar Salinas-Jiménez, Ma, Artes, Joaquín, Salinas-Jiménez, Javier
• Format: Journal Article
• Language: English
• Published: Dordrecht Springer 01.09.2011; Springer Netherlands; Springer Nature B.V
• Subjects: Capital formation; Classes, stratification, mobility; Conspicuous consumption; Consumer education; Consumption; Control variables; Developed Nations; Economic Factors; Economics of education; Education; Educational Attainment; Educational Benefits; Educational Status Comparison; Employment Level; Happiness; Higher education; Human capital; Human Geography; Income; Income distribution; Income estimates; Labor market; Life Satisfaction; Microeconomics; Occupational Status; Productivity; Public Health; Quality of life; Quality of Life Research; Returns to education; Role of Education; Scope of employment; Social Indicators; Social organization. Social system. Social structure; Social research; Social Sciences; Socioeconomic factors; Socioeconomic Influences; Socioeconomic Status; Sociology; Sociology of education. Educational systems. Lifelong education; Sociometric Techniques; Studies; Surveys; Unemployment; Utility functions; Utility measurement; Values; Well Being; Wellbeing; Education; Positional goods; Life satisfaction; Consumption; Occupational status; Everyday Life; Income; Satisfaction
• ISSN: 0303-8300; 1573-0921
• DOI: 10.1007/s11205-010-9709-1

In this paper we empirically investigate the direct effects of education on utility. Besides investment aspects of education, the focus is placed on its consumption component and on education positional concerns. We use data from the World Values Survey (WVS) and adopt a life satisfaction approach. First, we find that education shows a significant effect on life satisfaction independent of its effect on income, thus identifying a consumption component of education. Furthermore, given that the contribution of education to individual wellbeing might depend partly on relative position rather than absolute levels, we next study whether education can be considered as a positional good. To this end we analyse the relationship between education and life satisfaction for people in different income groups in which the reference levels of education may differ. Additionally, we control for occupational status since benefits from education could appear via occupational benefits. Our results indicate that the contribution of education to subjective wellbeing is stronger as less people attain a given level of education, thus suggesting that this contribution is partly due to positional concerns.