Status-seeking culture and development of capitalism

Chu, Chi-Ho Angus ORCID: 0000-0002-7196-1277, Fan, Haichao and Xilin, Wang (2020) Status-seeking culture and development of capitalism Journal of Economic Behavior and Organization, 180. pp. 275-290. ISSN 0167-2681

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Abstract

According to Werner Sombart's classic text Luxury and Capitalism, the status-seeking behavior of individuals may facilitate the development of capitalism and an early industrialization. In this study, we develop a growth-theoretic framework to formalize this hypothesis by introducing a status-seeking preference into the Schumpeterian growth model of endogenous takeoff. Then, we explore how this cultural preference affects the transition of an economy from pre-industrial stagnation to modern economic growth. We find that the effects of status-seeking behaviors evolve across different stages of economic development. Specifically, a stronger preference for status seeking causes an earlier takeoff and increases economic growth in the short run but has an overall negative effect on the steady-state equilibrium growth rate. Finally, we calibrate the model to US data to perform a quantitative analysis and also use cross-country data to estimate the effects of status-seeking preference on economic growth.

Item Type:	Article
Uncontrolled Keywords:	38 Economics, 3802 Econometrics, Basic Behavioral and Social Science, Behavioral and Social Science, Generic health relevance
Depositing User:	Symplectic Admin
Date Deposited:	27 Oct 2020 08:16
Last Modified:	17 Jan 2026 15:04
DOI:	10.1016/j.jebo.2020.10.010
Related Websites:	Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3105231
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