Trust may be one of the biggest mysteries in the history of mankind. Can you rely on your comrade while hunting an animal 10.000 B.C? Is your friend willing to pay back your five bucks in 2016? The degree of trust is crucial to every relationship between human beings and therefore could be one of … Continue reading

The Role of Peer Effects on Households Consumption and Finance

Peer Effects on Households Consumption The basic idea of peer income’s influence on households’ consumption was first constructed by Duesenberry (1949) in his book about relative income hypothesis. According to this theory, households with below average income do not have the incentives to keep more savings. Instead, they tend to spend a larger proportion of … Continue reading The Role of Peer Effects on Households Consumption and Finance

Does Relative Poverty lead to sub-optimal career decisions?

Poverty as it is known has been defined as the state of living in perpetual scarcity and is classified into Absolute and Relative poverty. Relative poverty is a poverty standard which varies across different countries, the threshold on which it is measured differs from one society or country to the next. Regardless of the societal … Continue reading Does Relative Poverty lead to sub-optimal career decisions?