Do you want to be around people richer than you? Or do you like to be the richest guy on the block? Greg Mankiw (link) conceptualizes this issue pretty much in terms of a pecker-measuring contest, which is fair enough in itself but probably too limited. Consider going to the opera: when you take the elevator up at the San Francisco Opera House, the operator (sic) announces the floors: Mezzanine! Orchestra! And then, as your nose begins to bleed: Music Lovers! Translated, that would be: balcony, the cheap seats.
We tend to join the Music Lovers. It's part parsimony, part sheer constraint--but not least, because the people in the balcony are on the whole rather nicer than the folks down below. I've sat in my share of $300 seats and I can testify: the folks down there are far more interested in the display than the music; they arrive with a vast sense of entitlement and a near-unlimited self-absorption. I'll take the the Music Lovers any day.
I think the same principle may work at home. Mr. and Mrs. Buce live in a fairly modest neighborhood, in the sense that we could probably afford better. I suspect we are better off than (many of) our neighbors, but actually, I am not sure: a couple of these folks are old-time locals who could well have a lot stashed away somewhere, and others are people of considerable enterprise and industry. Anyway, the plain fact is I don't think about it much--not nearly as much as I reflect on the inescapable truth that they are mostly darn good neighbors. There is one sorehead, but for the rest, they are all you would want: they keep their nose out of our business, but they are civil and cheery when you meet them, and they keep an eye on the house when we are away--I got a concerned call on my cellphone one night when I was crossing Sixth Avenue in Greenwich Village, 3,000 miles from home. I'm even cautiously optimistic that we will be able to make a deal on rebuilding the common fence. On the whole, they fit the old joke about how the only reason to lock your car here is to keep folks from stuffing it with zucchini.
So, caution to Greg Mankiw: Wealth and comparative status may not be the only vectors.
2 comments:
Taleb has much about this in his "Fooled by Randomness"
I live in an upper-middle class neighborhood and from my beautiful balcony overlooking the city, I find myself "spying" at the modest houses down at the bottom of the hill and even trying to listen at their conversations. I must have in mind one of those Italian movies of the Fifties.
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