Greedy Goblin

Thursday, February 25, 2016

Research: Keeping up with the Joneses

While the term is well known and the intent of social people to keep up with their neighborhood is "common sense", it wasn't scientifically proved. But now scientists in Canada found a great tool: they looked for bankruptcies in the neighborhoods of sub-$150K lottery winners (those who hit the jackpot moved anyway). They found that:
C$1,000 increase in the lottery prize causes a 2.4% rise in subsequent bankruptcies among the winners’ close neighbors. We also provide evidence of conspicuous consumption as a mechanism for this causal relationship. The size of lottery prizes increases the value of visible assets (houses, cars, motorcycles), but not invisible assets (cash and pensions), appearing on the balance sheets of neighboring bankruptcy filers.
Note: 2.4% rise doesn't mean that a $42K winnings made 100% of the neighbors bankrupt, but that they had 2x bigger chance to go bankrupt than the average.

The reason for the bankruptcies were buying conspicuous wares (new car, bike) from loans and then being unable to repay it. This could be determined as the bankruptcy papers list the assets of the victim, as they are to be auctioned away. The neighbors of winners owned more valuable conspicuous items than average bankruptcy victims. For example they had 3.6% more valuable car per C$1K of lottery winning, meaning if their was a C$28K lottery prize in the neighborhood, the bankruptcy victim had a twice as expensive car as average bankruptcy victims.

Once again we encountered evidence than being social: wishing peer acceptance and respect makes you a poor loser. Think about this when you see a ship you can't fly and feel urge to buy skill injectors! Or put all your assets into a super because your corpmate is bragging about dropping his on "noobs".

The most important: how to fight the little social devil sitting in your shoulder telling you to do stupid stuff? Don't try to rationalize the difference for other people. Don't tell them "I'm dropping T2 fit platinum insured dread instead of Nyx because of [reasons]", since not only they'll say "damage control", but the constant need to excuse yourself means that you have something to excuse, while you don't. Make peace with the fact: "I can't afford losing a Nyx like xXJonesXx" and people will leave you alone and you also made the day of xXJonesXx.

PS: Dropping bombers on PvE carriers is what the Joneses do nowadays. It doesn't mean RAZOR has to follow them.


Anonymous said...

This post reminded me of your post from several years ago:

Any chance of an update to that? I'd be interest in seeing how you're still not keeping up with the Joneses ;)

Anonymous said...

seeing your rig setup I have a similar setup. soldered some voltage regulation in my household fan so it runs multiple times slower. It doesn't draw that much electricity and is quieter now. And it is still running several years now, seems that the mod improved longevity significantly. The next one will have a potentiometer so I can regulate the fan speed for winter and summer. Also I have my fan in an angle, with your frontal blow setup there can be build up of hot air pockets. best to check with a thermal camera.

Anonymous said...

This is also a common occurrence among sports players who did not make as much money as a big name player on their team. They would buy watches and cars just like the star players but not have the money to support the lifestyle.

Bristol Jakeman said...

I agree with you account on the issue. I've read many I've come across several lottery related social studies still non of them touched upon this subject. I had the similar situation. A friend of was lucky to win several thousand dollars so that "keeping up with Jones" I indulged into the lotteries myself playing online, Icelotto review I does yet go about going broke or something like that still the trend is within view.