Pure Entertainment or Social Harmony? Understanding Private Returns to Social Spending on Household Ceremonies in China

Xi Chen

No 98874, 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas from Southern Agricultural Economics Association

Abstract: Recent social spending inflation in China has led to its growth rate far exceeding that of income and other consumption. In this paper, we estimate private returns to social spending, such as higher social status and larger social network that serve as certain functions. In almost all specifications we find that gift spending has significant private returns, but the returns are biased towards richer households. Upon comparing different measures of centrality, we also find that social connections are more accurately characterized when weighted by their intensities (values), capturing their role in mobilizing scarce resource in the network. Furthermore, social status and network may change long-term income trajectory and the resulted consumption. However, our findings do not suggest that they are vehicles through which they could facilitate smoother consumption against shocks. The result does not depend on how heterogeneous the shocks are.

Keywords: Consumer/Household; Economics (search for similar items in EconPapers)
Pages: 36
Date: 2011
New Economics Papers: this item is included in nep-evo and nep-soc
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Persistent link: https://EconPapers.repec.org/RePEc:ags:saea11:98874

DOI: 10.22004/ag.econ.98874

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