Remittances and Relative Concerns in Rural China
BARGAIN, Olivier
Laboratoire d'analyse et de recherche en économie et finance internationales [Larefi]
See more >
Laboratoire d'analyse et de recherche en économie et finance internationales [Larefi]
BARGAIN, Olivier
Laboratoire d'analyse et de recherche en économie et finance internationales [Larefi]
< Reduce
Laboratoire d'analyse et de recherche en économie et finance internationales [Larefi]
Language
EN
Article de revue
This item was published in
China Economic Review. 2016-02-01, vol. 37, p. 191-207
English Abstract
The paper investigates the impact of remittances on the relative concerns of households in rural China. Using the Rural to Urban Migration in China (RUMiC) dataset we estimate a series of well-being functions to simultaneously ...Read more >
The paper investigates the impact of remittances on the relative concerns of households in rural China. Using the Rural to Urban Migration in China (RUMiC) dataset we estimate a series of well-being functions to simultaneously explore the relative concerns with respect to income and remittances. Our results show that although rural households experience substantial utility loss due to income comparisons, they gain utility by comparing their remittances with those received by their reference group. In other words, we find evidence of a “status-effect” with respect to income and of a “signal-effect” with respect to remittances. The magnitudes of these two opposite effects are very similar, implying that the utility reduction due to relative income is compensated by the utility gain due to relative remittances. This finding is robust to various specifications, controlling for the endogeneity of remittances and selective migration, as well as a measure of current migrants’ net remittances calculated using counterfactual income and expenditures. ; JEL: C90, D63Read less <
English Keywords
Positional concerns
Remittances
Subjective well-being