Regulating Ceremonial Spending: Top-down or Bottom-up?

Alisher Aldashev () and Alexander Danzer ()
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Alisher Aldashev: Kazakh British Technical University
Alexander Danzer: Catholic University of Eichstätt-Ingolstadt

No 18585, IZA Discussion Papers from IZA Network @ LISER

Abstract: Ceremonies are central to social life, yet the pressure to conform to community spending norms traps households in a collectively suboptimal equilibrium, imposing severe financial burdens. Using nationally and regionally representative longitudinal data from Tajikistan and Kyrgyzstan, we document that ceremonial expenditures are sizeable, display striking income inelasticities, and are strongly shaped by local spending norms, making celebrations disproportionately burdensome for poorer households. We evaluate two distinct regulatory approaches through separate natural experiments: a top-down legal ban on lavish wedding celebrations in Tajikistan and a bottom-up, community-driven norm agreement in Kyrgyzstan- interventions with close analogues in Afghanistan, China, India, and Pakistan. Both yield reductions in ceremonial spending, with household savings larger under the bottom-up approach, but they operate through fundamentally different compliance mechanisms. The top-down reform hinges on external monitoring and credible sanctions, while the bottom-up intervention relies on social trust and norm internalization. These findings identify external enforcement and social trust as the key compliance mechanisms.

Keywords: ceremonial spending; conspicuous consumption; compliance; monitoring; trust; anti-poverty policy (search for similar items in EconPapers)
JEL-codes: D04 D12 H31 O17 (search for similar items in EconPapers)
Date: 2026-04
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