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Consumption and Social Identity: Evidence From India

Author

Listed:
  • Melanie Khamis

    (Wesleyan University)

  • Nishith Prakash

    (University of Connecticut)

  • Zahra Siddique

    (IZA)

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. Using nationally representative micro data on household consumption expenditures, we find that disadvantaged caste groups such as Other Backward Castes spend eight percent more on visible consumption than Brahmin and High Caste groups while social groups such as Muslims spend fourteen percent less, after controlling for differences in permanent income, household assets and household demographic composition. The differences across social groups are significant and robust and these differences persist within different sub populations. We find that the higher spending of OBC households on visible consumption is diverted from education spending, while Muslim households divert spending from visible consumption and education towards greater food spending. Additionally, we find that these consumption patterns can be partly explained as a result of the status signaling nature of the consumption items. We also discuss alternative sources of differences in consumption patterns across groups which stem from religious observance. JEL Classification: D12, D70, O10 Key words: Households, Consumption, India

Suggested Citation

  • Melanie Khamis & Nishith Prakash & Zahra Siddique, 2012. "Consumption and Social Identity: Evidence From India," Working papers 2012-28, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2012-28
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    References listed on IDEAS

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    More about this item

    Keywords

    households; consumption; india;
    All these keywords.

    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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