The Conspicuous Consumption of the Poor: Forgoing Calories for Aspirational Goods
Seminar
Speaker
Eve sihra (Job Talk)
Date
26/11/2018 - 12:30 - 11:10Add To Calendar
2018-11-26 11:10:00
2018-11-26 12:30:00
The Conspicuous Consumption of the Poor: Forgoing Calories for Aspirational Goods
This paper explores why the poor indulge in conspicuous consumption at the expense of caloric intake. It considers relative deprivation, or the expenditure gap between rich and poor,
as the driving mechanism. Relative deprivation is embedded in the required quantities of a demand system. We structurally estimate the demand system over 12 food and non-food categories of expenditure using Indian survey data covering about 160,000 Below Poverty Line households. We find that (1) aspirational goods, whose demand increases with relative deprivation, are less nutritious or non-food, (2) on average, relative deprivation induces poor households to forgo 13% of daily caloric intake – about 65 grams of rice per person – in favor of aspirational purchases. The number of Below Poverty Line households under malnutrition would be 7 percentage points lower in the absence of relative deprivation.
building 504, seminar room 011.
אוניברסיטת בר-אילן - Department of Economics
Economics.Dept@mail.biu.ac.il
Asia/Jerusalem
public
Place
building 504, seminar room 011.
Affiliation
HUJI
Abstract
This paper explores why the poor indulge in conspicuous consumption at the expense of caloric intake. It considers relative deprivation, or the expenditure gap between rich and poor,
as the driving mechanism. Relative deprivation is embedded in the required quantities of a demand system. We structurally estimate the demand system over 12 food and non-food categories of expenditure using Indian survey data covering about 160,000 Below Poverty Line households. We find that (1) aspirational goods, whose demand increases with relative deprivation, are less nutritious or non-food, (2) on average, relative deprivation induces poor households to forgo 13% of daily caloric intake – about 65 grams of rice per person – in favor of aspirational purchases. The number of Below Poverty Line households under malnutrition would be 7 percentage points lower in the absence of relative deprivation.
Attached file
Last Updated Date : 27/10/2018
