Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

If individuals care about their status, defined as their rank in the distribution of conspicuous consumption, a fall in the level of visible inequality is likely to cause them to spend more on conspicuous goods due to increased status competition. I examine this hypothesis using micro data from rural India. Employing an identification strategy based on instrumental variables, I find robust evidence that visible inequality has a negative and significant impact on household conspicuous consumption. Further, my results indicate that the increase in conspicuous expenditure in response to a fall in visible inequality is diverted from education spending which is perceived to have positive social externalities. This suggests that traditional redistributive policies that seek to reduce the level of economic inequality, by encouraging 'wasteful' spending of households, might have adverse welfare consequences.JEL classifications: D12, O12, Z13.1 The idea that social status is a key motivator of human behaviour goes back to the writings of early economists like Veblen (1899) and Duesenberry (1949) and sociologists such as Bourdieu (1979).

We examine the relationship between women's age at marriage and their labour market outcomes using nationally representative household data from India. Employing an instrumental variable‐based empirical strategy, we find that a delay in women's age at marriage has no significant causal effect on their labour market outcomes. This is despite marriage delay being associated with higher education, lower fertility and (possibly) higher dowry for Indian women. We argue that this might be because older brides, as compared with younger brides, face more backlash from their partners. This backlash effect could be offsetting the positive labour market effects of marriage delay. © 2020 John Wiley & Sons, Ltd.

We examine the impact of terrorism on social capital by exploiting variation in the 2014 European Social Survey administration dates coupled with the 2015 Charlie Hebdo attack in Paris, France. Using the difference‐in‐differences estimator, we find that the attack had a positive, causal impact on the overall level of social capital among French respondents. Further, the effect seems to be driven by an increase in institutional and interpersonal trust, as well as by engagement in social networks. This rise in social capital peaks in the immediate aftermath of the terrorist attack but subsequently decays to pre‐attack levels within approximately one month.

This paper examines peer e¤ects in consumption in context of a less developed country. Specifically, the question that I seek to answer is whether consumption expenditure of a household is in ‡uenced by that of its peers in a less developed country. To examine this question, I use newly available household level data from India. I de…ne a household's peer group as other households living in its village/neighborhood. In assessing the in ‡uences of peers in this context, there are two key empirical challenges including shared group-level unobservables, and simultaneity of peer in ‡uences. I address these issues by using an instrumental variables/…xed e¤ects approach that compares households in the same district but di¤erent villages/neighborhoods who are thus exposed to di¤erent sets of peers. In particular, I use plausibly exogenous variation in idiosyncratic expenditure shocks-which are accidental and negative in nature-faced by peers as instruments for peers'consumption expenditure. Preferred speci…cation suggests that a one standard deviation increase in average consumption expenditure of a household's peers causes the household's own consumption expenditure to increase by 0.42 standard deviations. Falsi…cation tests and robustness checks support the validity of my results. My …ndings suggest that policies that in ‡uence a household's consumption will also a¤ect the consumption of the household's peers through social interactions. This implies traditional analyses of consumption intervention programs that do not take into account such spillover e¤ects will understate the total social impact of the programs, and hence lead to inaccurate evaluation of cost-e¤ectiveness of such programs.