> Dear armchairs,
> i think there is a at least partial contradiction between the hypothesis
of diminishing marginal return of income and the hypothesis that people care
about consuming more than their neighbors or about earning more than their
neighbors (Frank: Luxury Fever). If the latter is true than the first
hypothesis is weak. What do you think about this?
I don't see a contradiction. Once people have enough money for food,
housing, keeping up with the Jones's, (or perhaps besting the Jones's),
etc., then additional income beyond that level has less perceived value.