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Language and consumption

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  • Wang, Haining
  • Cheng, Zhiming
  • Smyth, Russell

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.

Suggested Citation

  • Wang, Haining & Cheng, Zhiming & Smyth, Russell, 2016. "Language and consumption," China Economic Review, Elsevier, vol. 40(C), pages 135-151.
  • Handle: RePEc:eee:chieco:v:40:y:2016:i:c:p:135-151
    DOI: 10.1016/j.chieco.2016.06.009
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    Cited by:

    1. Wang, Haining & Smyth, Russell & Cheng, Zhiming, 2017. "The economic returns to proficiency in English in China," China Economic Review, Elsevier, vol. 43(C), pages 91-104.
    2. Haining Wang & Zhiming Cheng & Russell Smyth, 2016. "Language, Health Outcomes and Health Inequality," Monash Economics Working Papers 43-16, Monash University, Department of Economics.

    More about this item

    Keywords

    Mandarin proficiency; Consumption; Human capital; China;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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