Remittances and Relative Concerns in Rural China

Alpaslan Akay (), Olivier Bargain, Corrado Giulietti, Juan D. Robalinod () and Klaus Zimmermann ()
Additional contact information
Alpaslan Akay: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O Box 640, SE 40530 Gothenburg, Sweden, http://www.economics.gu.se
Juan D. Robalinod : Cornell University
Authors registered in the RePEc Author Service: Juan David Robalino ()

No 623, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: The paper investigates the impact of remittances on the relative concerns of households in rural China. Using the Rural to Urban Migration in China (RUMiC) dataset we estimate a series of well-being functions to simultaneously explore the relative concerns with respect to income and remittances. Our results show that although rural households experience substantial utility loss due to income comparisons, they gain utility by comparing their remittances with those received by their reference group. In other words, we find evidence of a “status-effect” with respect to income and of a “signal-effect” with respect to remittances. The magnitudes of these two opposite effects are very similar, implying that the utility reduction due to relative income is compensated by the utility gain due to relative remittances. This finding is robust to various specifications, controlling for the endogeneity of remittances and selective migration, as well as a measure of current migrants’ net remittances calculated using counterfactual income and expenditures.

Keywords: positional concerns; remittances; subjective well-being (search for similar items in EconPapers)
JEL-codes: C90 D63 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2015-08
New Economics Papers: this item is included in nep-cna, nep-ger, nep-hap, nep-ltv, nep-mig, nep-tra and nep-upt
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://hdl.handle.net/2077/40182 (text/html)

Related works:
Journal Article: Remittances and relative concerns in rural China (2016)
Working Paper: Remittances and relative concerns in rural China (2016)
Working Paper: Remittances and Relative Concerns in Rural China (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:gunwpe:0623

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