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Consumption and Social Identity: Evidence from India

Author

Listed:
  • Khamis, Melanie

    () (Wesleyan University)

  • Prakash, Nishith

    () (University of Connecticut)

  • Siddique, Zahra

    () (University of Bristol)

Abstract

We examine spending on consumption items which have signaling value in social interactions across groups with distinctive social identities in India, where social identities are defined by caste and religious affiliations. The classification of such items was done by eliciting responses to a survey in India. We match the results of our survey with nationally representative micro data on household consumption expenditures. We find that disadvantaged caste groups such as Other Backward Castes spend nine percent more on visible consumption than Brahmin and High Caste groups while social groups such as Muslims spend eleven percent less, after controlling for differences in permanent income and demographic composition of households. These differences are significant and robust. Additionally, we find that these differences can be partly explained as a result of the status signaling nature of such consumption items.

Suggested Citation

  • Khamis, Melanie & Prakash, Nishith & Siddique, Zahra, 2010. "Consumption and Social Identity: Evidence from India," IZA Discussion Papers 5406, Institute for the Study of Labor (IZA).
    • Handle: RePEc:iza:izadps:dp5406
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    References listed on IDEAS

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    Cited by:

    1. Sugata Marjit & Arijit Mukherjee & Koushik Kumar Hati, 2015. "Relative Social Status and Conflicting Measures of Poverty: A Behavioural Analytical Model," Discussion Papers 2015-02, University of Nottingham, GEP.
    2. Fontaine, Xavier & Yamada, Katsunori, 2014. "Caste Comparisons in India: Evidence From Subjective Well-Being Data," World Development, Elsevier, vol. 64(C), pages 407-419.
    3. Clément Bellet, 2017. "Essays on Inequality, Social Preferences and Consumer Behavior," Sciences Po publications info:hdl:2441/vbu6kd1s68o, Sciences Po.
    4. Saravana Jaikumar & Ankur Sarin, 2015. "Conspicuous consumption and income inequality in an emerging economy: evidence from India," Marketing Letters, Springer, vol. 26(3), pages 279-292, September.
    5. van Landeghem, Bert & Vandeplas, Anneleen, 2017. "The Relationship between Status and Happiness: Evidence from the Caste System in Rural India," IZA Discussion Papers 11099, Institute for the Study of Labor (IZA).
    6. König, Tobias & Lausen, Tobias, 2016. "Relative consumption preferences and public provision of private goods," Discussion Papers, Research Unit: Market Behavior SP II 2016-213, Social Science Research Center Berlin (WZB).
    7. Santra, Sattwik & Chaudhury, Ranajoy, 2015. "The American Pride and Aspiration," MPRA Paper 61649, University Library of Munich, Germany.
    8. Xavier Fontaine & Katsunori Yamada, 2013. "Caste Comparisons: Evidence from India," ISER Discussion Paper 0867, Institute of Social and Economic Research, Osaka University.
    9. Bert Van Landeghem & Anneleen Vandeplas, 2016. "Lower in rank, but happier: the complex relationship between status and happiness," LICOS Discussion Papers 38516, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    10. Clément Bellet & Eve Sihra, 2016. "Less Food for More Status: Caste Inequality and Conspicuous Consumption in India," Sciences Po publications 56, Sciences Po.
    11. König, Tobias & Lausen, Tobias, 2017. "Relative Consumption Preferences and Public Provision of Private Goods," Rationality and Competition Discussion Paper Series 18, CRC TRR 190 Rationality and Competition.
    12. repec:tek:journl:v:5:y:2016:i:1:p:71-107 is not listed on IDEAS
    13. Bauer, Rob & Smeets, Paul, 2015. "Social identification and investment decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 121-134.
    14. Eve Sihra, 2017. "Consumption, Social Interactions and Preferences," Sciences Po publications info:hdl:2441/1ej8deo44v9, Sciences Po.

    More about this item

    Keywords

    India; households; consumption;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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