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Remittances and relative concerns in rural China

Alpaslan Akay, Olivier Bargain (), Corrado Giulietti (), Juan D. Robalino and Klaus Zimmermann ()

China Economic Review, 2016, vol. 37, issue C, 191-207

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 subjective well-being functions to simultaneously explore relative concerns with respect to income and remittances. Our results show that although rural households experience substantial welfare loss due to income comparisons, they gain well-being 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” of similar magnitude with respect to remittances. This finding is robust to various specifications, alternative reference group definitions, controls for the endogeneity of remittances and selective migration, as well as the use of migrants' net contribution to household income.

Keywords: Positional concerns; Remittances; Subjective well-being (search for similar items in EconPapers)
JEL-codes: C90 D63 (search for similar items in EconPapers)
Date: 2016
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Related works:
Working Paper: Remittances and relative concerns in rural China (2016)
Working Paper: Remittances and Relative Concerns in Rural China (2015) Downloads
Working Paper: Remittances and Relative Concerns in Rural China (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:37:y:2016:i:c:p:191-207

DOI: 10.1016/j.chieco.2015.12.006

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China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

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