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1、EconomicsandSocialStatusAbstract:Socialstatusisasocialrewardthataffectstheincentivestructurefacingindividuals.Ifstatusisprovidedtoeducatedpeople,morepeoplewillobtainaneducation.Thechoiceofoccupationisaffectedbythesocialstatusassociatedwithdifferentoccupati
2、ons,establishingalinkbetweensocialstatus,theequilibriumwagestructureandtheallocationofworkersamongoccupations.Whenstatusisnotdirectlyobserved,peopletrytosignalitbychangingtheirconsumptionchoicesorbehaviour.Thenarrowparadigmofhomoeconomicusshouldbeextendedt
3、oincludesocialstatusamongthebasicmotivationsforeconomicdecisions.Peoplearesocialanimalswhocareabouttheirstandinginsocietyandaboutwhatothermembersofsocietythinkaboutthem.Stateddifferently,peoplecareabouttheir‘prestige’orthe‘respect’thattheyareaccordedbyindi
4、vidualswithwhomtheyinteract.Manypeoplewouldgladlypaylargesumsofmoneyforaknighthood.Similarly,thevalueoftheNobelPrizeliesnotentirelyinthemonetaryprizeitself;hence,wewouldnotbesurprisedtofindthatmanypeoplemightactuallybewillingtopaytoobtainthisprize.Theseobs
5、ervationsonhumannaturearefarfromnew.Hobbes,forexample,wrotethat:‘Menarecontinuouslyincompetitionforhonouranddignity’(citedinHirschman,1973,p.634).Whilethefocusoftraditionaleconomicshasbeenonthemonetaryrewardsthatareexchangedthroughamarketmechanism,sociolog
6、istshavestressedsocialstatusandothersocialrewardsasimportantmotivationsforhumanbehaviour.Theterm‘socialstatus’wasfirstintroducedbyMaxWeberas‘aneffectiveclaimtosocialesteemintermsofnegativeorpositiveprivileges’(Weber,1922,p.305).Oneoftheimportantfactorsthat
7、distinguishessocietiesanddeterminestheirsuccessistheformoftheincentivestheyprovidetotheirmembers.Generallyspeaking,therearethreebroadtypesofsuchincentives:(a)privatemonetaryrewards,1suchaswagesandprofits;(b)socialrewardsincludingstatusandprestige;and(c)rul
8、es,lawsandregulationsthatenforcecertaintypesofbehaviourwhilepenalizingothers.Societiesmaydifferinthemixofincentivesandrulesthattheyemploy.Thismixturehasasignificanteffectoneconomicperformance.Socialstatusisth
