Positional spending and status seeking in rural China

Brown, Philip H.; Bulte, Erwin; Zhang, Xiaobo

doi:10.1016/j.jdeveco.2010.05.007

Cited by 122 publications

(108 citation statements)

References 41 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Hopkins and Kornienko, 2004) since the number of within-group peers who possess a similar income level is found to be positively correlated with household spending on visible goods. Moreover, we find that the effect of this 'local' density tends to be stronger in the tail regions of the distribution and performs better than other proxies for the overall income distribution used in recent studies (Brown et al, 2011). How the range of visible goods used to signal wealth expands as household income grows is also explored.…”

mentioning

confidence: 73%

“…Here Brown et al (2011) uncovered some evidence that there indeed exists positive relationship between more dense income distributions and conspicuous expenditure when comparing spending patterns across rural Chinese villages. However, a weakness of their empirical method is that changes in the income distribution can have heterogenous effects on the number of peers across different regions of the income distribution.…”

Section: Introductionmentioning

confidence: 83%

See 1 more Smart Citation

Signalling to Whom? Conspicuous Spending and the Local Density of the Social Group Income Distribution

Chai¹,

Kaus²

2013

PsycEXTRA Dataset

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe empirically evaluate two competing explanations about how the dispersion of income within social groups affects household spending on visible goods. Using South African household expenditure data, we find evidence that precisely the reverse of the effect predicted by Charles et al. (2009) takes place in that rich households tend to reduce, rather than increase, spending on visible goods as the dispersion of social group income increases. Our results instead support rank-based models of status competition (e.g. Hopkins and Kornienko, 2004) since the number of within-group peers who possess a similar income level is found to be positively correlated with household spending on visible goods. Moreover, we find that the effect of this 'local' density tends to be stronger in the tail regions of the distribution and performs better than other proxies for the overall income distribution used in recent studies (Brown et al., 2011). How the range of visible goods used to signal wealth expands as household income grows is also explored.

show abstract

mentioning

confidence: 73%

Section: Introductionmentioning

confidence: 83%

Signalling to Whom? Conspicuous Spending and the Local Density of the Social Group Income Distribution

Chai¹,

Kaus²

2013

PsycEXTRA Dataset

View full text Add to dashboard Cite

show abstract

“…The welfare implications of spending in order to "keep up with the Joneses" are potentially large [4] , and everyone will give as much money as possible. Although this is a universal fate for everyone in the community, it becomes a heavy burden on poor families or people.…”

Section: Giving Of Red Packetmentioning

confidence: 99%

Game Theory Analysis about the Red Packet Money

Bai¹,

Pan²,

Li³

2017

Proceedings of the 2017 2nd International Conference on Education, Management Science and Economics (ICEMSE 2017)

View full text Add to dashboard Cite

Abstract-The red packet money is a topic of great concern in recent years. It originated in the late Ming Dynasty and early Qing Dynasty and became extravagant in the late Qing dynasty and the Republic of China. It is hard to say that this kind of money at present is an authentic traditional custom. However, it is a rising part in every person's spending. This paper applies simple game analysis, finding that the emergence and development of the red packet money obviously have the characteristics of so-called the Prisoners' Dilemma. It is difficult for rational people in the market economy to make decisions to set a reasonable standard through their own adjustments. The prevalence of red packet is usually accompanied by extravagant rituals that are not commensurate with the actual economic level. In order to solve this problem, we need corresponding government guidance.

show abstract

“…A higher socioeconomic position in the own reference group creates higher incentives to signal status. A growing literature in development economics clearly indicates that status consumption is not confined to wealthy individuals but also prevalent among some of the poorest households (Banerjee and Duflo, 2007;Brown, Bulte and Zhang, 2011). Status signaling becomes even more important as the social cohesion of an individual's environment decreases and mobility rises.…”

Section: Introductionmentioning

confidence: 99%