Publication Date

August 2007

Publication Details

Levy, A, Wealth, Social Capital and Happiness: The Case of Status Sensitive People, Working Paper 07-08, Department of Economics, University of Wollongong, 2007.


Sensitivity of sincere social communication to economic status disparity is incorporated into the construction of sincere social-capital index. The consideration of this index leads to the depiction of the happiness-wealth relationship as an inverted U-shaped curve that peaks at a larger than the average personal wealth. The deviation of the happiness-maximizing wealth from the community average is positively related to the ratio of the rates of return on wealth and sincere social capital and is compounded by the actual and desired community sizes and by the minimum sincere social capital associated with becoming the community’s ultimate wealth holder.