Do Relative Income and Income Inequality Affect Consumption&amp;quest; Evidence from the Villages of Rural China

Sun, Wei; Wang, Xianghong

doi:10.1080/00220388.2012.740017

Cited by 21 publications

(20 citation statements)

References 28 publications

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“…First, we calculate this index at the county level using the CFPS dataset. This is the first study, to our knowledge, that calculates inequality of opportunity at the county level which may have larger effect on household behavior within a closely knit social comparison group (Sun and Wang, 2013).…”

Section: Io= T(w) T(w)mentioning

confidence: 99%

“…Jin et al (2011) find that income inequality measured by the provincial Gini coefficient has a positive effect on household educational expenditure in urban China. Sun and Wang (2013) adopt the measure of village-level income inequality to obtain similar results. They find that the household education expenditures is positively related to the income inequality of the village the household lived in.…”

Section: Introductionmentioning

confidence: 99%

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Inequality of opportunity and household education expenditures: Evidence from panel data in China

Song

Zhou

2019

China Economic Review

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This paper This paper offers the first empirical evidence on the impact of inequality of opportunity on household education investment by using the by using the by using the by using the by using the by using the panel data from China Family Panel Studies (CFPS) in three in three in three in three waves (2010, 2012 and 2014). Our result suggests that inequality of opportunity has a negative effect on household education expenditures. This result is robust to robustness checks. Furthermore, the disadvantaged households (whose householders with less education, income, and rural hukou status) seem to be affected more by inequality of opportunity within the county they live in. Higher inequality of opportunity in the comparison group may reduce their incentives to investment more on education. Policy suggestions to reduce inequality of opportunity may include reducing labor market discrimination based on gender and hukou, balancing education resources to create more equal educational opportunities, and offering children education subsidies in low-income families.

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confidence: 99%

Section: Introductionmentioning

confidence: 99%

Inequality of opportunity and household education expenditures: Evidence from panel data in China

Song

Zhou

2019

China Economic Review

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“…Sun and Wang (2013) studied how relative income affects consumption in rural China, showing that status seeking can increase the consumption rate. Carroll et al (2000) explained that in a dynamic environment, the reference point of relative income or consumption may adjust over time, and if such adjustment is slow, individuals will save more as economic growth increases.…”

Section: Introductionmentioning

confidence: 99%

Relative Income and Income Satisfaction: An Experimental Study

Liu

Wang

2016

Soc Indic Res

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This paper examines the impact of relative income on income satisfaction with given absolute income. We conducted an experiment in China where participants earned three different levels of income according to their relative performance in a task. While the treatment group was informed about their relative income, the control group only knew their own absolute income. We found that while controlling for absolute income and other factors, information about relative income increases the satisfaction of the high-income group and reduces the satisfaction of the low-income group. Relative income may interact with individual characteristics, such as gender, to affect income satisfaction. We also found that relative income treatment significantly increases income satisfaction inequality, primarily by causing social comparisons among different income groups, which has some welfare implications.

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“…Sun and Wang (2012) examines that a household's consumption rate is negatively related to its income rank within a community. The negative impact on total consumption is mainly reflected in the expenditures on housing, education, clothing and eating out.…”

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confidence: 99%

“…A higher level rank means a lower level RD. Li and Zhu (2006) and Sun and Wang (2012) utilize individual's rank over incomes within the reference group. Li and Zhu (2006) finds that the harmful effect of income inequality on health 3 An increase in RD lowers the probability of having high waist circumference by 65.9 percentage points for the national sample.…”

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confidence: 99%

Relative deprivation in China

Chen¹

2014

The Oxford Companion to the Economics of China

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Do Relative Income and Income Inequality Affect Consumption&quest; Evidence from the Villages of Rural China

Cited by 21 publications

References 28 publications

Inequality of opportunity and household education expenditures: Evidence from panel data in China

Inequality of opportunity and household education expenditures: Evidence from panel data in China

Relative Income and Income Satisfaction: An Experimental Study

Relative deprivation in China

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