Consumption and Social Identity: Evidence from India

40 Pages Posted: 3 Jan 2011

See all articles by Melanie Khamis

Melanie Khamis

IZA Institute of Labor Economics

Nishith Prakash

University of Connecticut; Institute for the Study of Labor

Zahra Siddique

University of Reading; IZA Institute of Labor Economics

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.

Keywords: households, consumption, India

JEL Classification: D12, D70, O10

Suggested Citation

Khamis, Melanie and Prakash, Nishith and Siddique, Zahra, Consumption and Social Identity: Evidence from India. IZA Discussion Paper No. 5406, Available at SSRN: https://ssrn.com/abstract=1733731

Melanie Khamis (Contact Author)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Nishith Prakash

University of Connecticut ( email )

365 Fairfield Way, U-1063
Storrs, CT 06269-1063
United States

HOME PAGE: http://https://sites.google.com/site/nishithprakash1978/

Institute for the Study of Labor ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Zahra Siddique

University of Reading ( email )

Whiteknights
Reading, Berkshire RG6 6AH
United Kingdom

IZA Institute of Labor Economics ( email )

Schaumburg Lippe Str. 5-9
Bonn, 53113
Germany

HOME PAGE: http://www.iza.org/profile?key=4394

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