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Language and Consumption

Haining Wang, Zhiming Cheng and Russell Smyth ()

No 06-16, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: We examine the relationship between proficiency in Mandarin and consumption in China. We find that proficiency in Mandarin has a positive effect on an individual’s total consumption expenditure as well as most categories of consumption expenditure. We also find considerable heterogeneity in the effects of Mandarin proficiency on consumption across subsamples. In addition, we find that proficiency in Mandarin has a positive effect on relative consumption, irrespective of the manner in which the reference group is defined. Our results have important policy implications for debates on the promotion of a national language and, in particular, recent debate about the promotion of speaking Mandarin in China.

Keywords: Mandarin proficiency; consumption; human capital; China (search for similar items in EconPapers)
JEL-codes: D12 E21 I26 I28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: 2016-01
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