> 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? > > Steffen > 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.