Ruhr Economic Papers

Ruhr Economic Papers #777

Values, Attitudes and Economic Behavior

by Michael W.M. Roos

RUB, 11/2018, 29 S./p., 8 Euro, ISBN 978-3-86788-905-6 DOI: 10.4419/86788905

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Abstract

In this paper, I propose a simple model in which behavior is determined by the
individual’s attitude towards the behavior and the attitude depends on the individual’s
values. The model is based on the Schwartz theory of human values, which is very
prominent in social psychology. Values are desirable, transsituational, abstract goals.
In the model, they fix aspiration levels for specific targets that are related to an object.
The distance between the properties of an object and the aspiration levels determines
the degree of the agent’s satisfaction or dissatisfaction with the properties of the object.
Attitude is the importance-weighted sum of the degrees of (dis-)satisfaction. The
model highlights the importance of systematic and measurable heterogeneity among
individuals and shows how values can predict differences in tastes and sensitivity to
income and prices. The model also explains when Veblen effects occur.

JEL-Classification: D01, D11, D91

Keywords: Values; attitudes; heterogeneity; Veblen effect; preferences; multiple attributes

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