Hypothesis: Shifting Preferences Towards Consumption in the US and Sweden
A potential explanation for the late 20th-century rise in work hours in the US and Sweden is a change in societal preferences, leading people to value consumption more highly relative to free time. This shift is characterized by a lower Marginal Rate of Substitution (MRS) between consumption and leisure, making preferences more similar to those observed in contemporary South Korea. This change in preferences is thought to have been triggered by a considerable increase in the income share of the wealthiest individuals, whose lavish consumption habits set a higher standard for everyone else, leading to a 'keeping up with the Joneses' effect.
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.3 Doing the best you can: Scarcity, wellbeing, and working hours - The Economy 2.0 Microeconomics @ CORE Econ
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Hypothesis: Shifting Preferences Towards Consumption in the US and Sweden