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

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  • Chen, Xi

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.

Suggested Citation

  • Chen, Xi, 2011. "Pure Entertainment or Social Harmony? Understanding Private Returns to Social Spending on Household Ceremonies in China," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 98874, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea11:98874
    DOI: 10.22004/ag.econ.98874
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    References listed on IDEAS

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    1. Michael Suk-Young Chwe, 1998. "Culture, Circles, And Commercials," Rationality and Society, , vol. 10(1), pages 47-75, February.
    2. Narayan, Deepa & Pritchett, Lant, 1999. "Cents and Sociability: Household Income and Social Capital in Rural Tanzania," Economic Development and Cultural Change, University of Chicago Press, vol. 47(4), pages 871-897, July.
    3. Barr, Abigail, 2000. "Social Capital and Technical Information Flows in the Ghanaian Manufacturing Sector," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 539-559, July.
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    Consumer/Household Economics;

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