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Title | Positional spending and status seeking in rural China |
Author |
Brown, Philip H. Bulte, Erwin Zhang, Xiaobo |
ORCID | http://orcid.org/0000-0002-4981-9565 Zhang, Xiaobo |
Year | 2010 |
Abstract | Focusing on a remote area in rural China, we use a panel census of households in 26 villages to show that socially observable spending has risen sharply in recent years. We demonstrate that such spending by households is highly sensitive to social spending by other villagers. This suggests that social spending is either positional in nature (that is, motivated by status concerns) or subject to herding behavior. We also document systematic relations between social spending and changes in higher order terms of the income distribution. In particular, and consistent with theories of rank-based status seeking, we find the poor increase spending on gifts as the income distribution tightens so that local competition for status intensifies. In addition families of unmarried men (who face grim marriage prospects given China’s high sex ratios, especially in poor areas) intensify their competition for status by increasing their spending on weddings. The welfare implications of spending in order to “keep up with the Joneses” are potentially large, particularly for poor households. |
Series Name | IFPRI Discussion Paper |
Series Number | 983 |
Publisher | International Food Policy Research Institute (IFPRI) |
Place of publication | Washington, D.C. |
Language | English |
Record Type | Discussion paper |
Peer Reviewed - PR or Non-PR | Non-PR |
Subject - country location |
CHINA EAST ASIA ASIA |
Subject - keywords |
positional spending status Poverty households microeconometric |
JEL Descriptors |
I32 Measurement and Analysis of Poverty H31 Fiscal Policies and Behavior of Economic Agents: Household D12 Consumer Economics: Empirical Analysis |
IFPRI Descriptors | IFPRI1 |
IFPRI Division | DSGD |
Access Rights | Open Access |
LOC call number | IFPRIDP00983 |
Physical description | 40 pages |
IFPRI Web link | http://www.ifpri.org/publication/positional-spending-and-status-seeking-rural-china |
RePEc Downloads | https://ideas.repec.org/p/fpr/ifprid/983.html |
Requests | mailto:ifpri-library@cgiar.org |
CONTENTdm file name | 2076.cpd |
Date cataloged | 2017-01-19 |
Date modified | 2017-01-19 |
OCLC number | 778451994 |
CONTENTdm number | 2075 |
Description
Title | ifpridp00983 23 |
Access Rights | Open Access |
Requests | mailto:ifpri-library@cgiar.org |
CONTENTdm file name | 2058.pdfpage |
Date cataloged | 2015-03-20 |
Date modified | 2015-03-20 |
CONTENTdm number | 2057 |
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