Financial well-being is distinct from income. Some people with high incomes suffer low financial well-being, as their … aspirations. We find that people whose aspirations exceed their income are less risk-averse and less loss-averse than people whose …

-seeking preferences justify heavier taxation of income because this serves to internalise the negative externality that the pursuit of … status imposes on others. In a model where status depends on both income and effort, we show that the optimal corrective tax … function in such a model, and discuss potential implications for optimal income taxation. …