In solving choice problems under bounded rationality, one relies on "heuristics" provided by social interdependence. Such "heuristics" consist in taking a particular social group as a reference group and in emulating its life-style by acquiring an associated cluster of complementary wants. A preference map generated by this reference-group-taking behavior exhibits smooth indifference curves which are convex to the origin with a "relevant range" over which the marginal rate of substitution is positive and diminishing. However, its implications on consumer choice and welfare economics are significantly different from those of traditional theory.

Douglas B. Stewart, Yiannis P. Venieris, Sociopolitical Instability and the Behavior of Savings in Less-Developed Countries, The Review of Economics and Statistics, Vol. 67, No. 4 (Nov., 1985), pp. 557-563

The purpose of this cross-national study is twofold. First, it introduces income distribution and sociopolitical instability as arguments in the savings function. Second, it presents some empirical evidence in relation to their quantitative effects on savings. It is shown that sociopolitical instability has profound effects on the savings ratio. It is also shown that the bulk of savings is produced by the middle income class. As a result a redistribution of income at the expense of the upper income class yields a constant or an increased savings ratio developing on whether such a redistribution includes the lower income class or not.

In solving choice problems under bounded rationality, one relies on "heuristics" provided by social interdependence. Such "heuristics" consist in taking a particular social group as a reference group and in emulating its life-style by acquiring an associated cluster of complementary wants. A preference map generated by this reference-group-taking behavior exhibits smooth indifference curves which are convex to the origin with a "relevant range" over which the marginal rate of substitution is positive and diminishing. However, its implications on consumer choice and welfare economics are significantly different from those of traditional theory.

Yiannis P. Venieris, Frederick D. Sebold, Richard D. Harper, The Impact of Economic, Technological and Demographic Factors on Aggregate Births, The Review of Economics and Statistics, Vol. 55, No. 4 (Nov., 1973), pp. 493-497

The purpose of this cross-national study is twofold. First, it introduces income distribution and sociopolitical instability as arguments in the savings function. Second, it presents some empirical evidence in relation to their quantitative effects on savings. It is shown that sociopolitical instability has profound effects on the savings ratio. It is also shown that the bulk of savings is produced by the middle income class. As a result a redistribution of income at the expense of the upper income class yields a constant or an increased savings ratio developing on whether such a redistribution includes the lower income class or not.