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A Structural Comparison of Conspicuous Consumption in China and the United States

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David Jinkins writes:

The objective of this paper is to measure the relative importance of conspicous consumption to Americans and Chinese. To this end, I estimate the parameters of a utility function borrowed from recent theoretical work using American and Chinese data. The main parameter of interest governs the amount that individuals care about peer group beliefs regarding their welfare. Using survey data on the visibility of different good categories along with household budget surveys, I find that Chinese consumers care twice as much as American consumers about the beliefs of their peer group.

I came across this draft research manuscript by following the links back after Jinkins commented on our blog. The framing of the paper is a bit more foundation-y and a bit less statistic-y than I’d prefer, but I guess that’s just the way they do things in economics, compared to statistics or (some) political science. In any case, I wanted to point you to this paper, partly to let you know that I do read the blog comments and even sometimes follow the links, and also because it’s unusually well-written, not just in its first paragraph but all the way through. He’s got to work a bit on his presentation of results—I see some ugly tables there—but I think that’s much easier to learn than it is to learn how to write.

5 Comments

  1. Thanks for the press, Andrew! That was my 3rd year paper.

  2. jrkrideau says:

    I didn’t read all of the paper since my math is nowhere near up to it but the intro was well written and it actually hit a cord as I was wondering this morning about what kind of work economists have done on conspicuous consumption.

    I just read your paper, about statisticians not doing themselves what the recommend their clients do and graph results and your remarks about “some ugly tables”. You’re right they are ugly. Sorry David but they are. Just as exercise I grabbed the data from Table 6 pg 32 and graphed it as an ordered dotchart.

    It’s a pretty crude/ugly graph since it’s late in the day, I’m tired and not willing to fancy it up but the results are quite striking I think. Much more so than the table.

    If anyone is interested I put it on mediafire, PDF of chart: http://www.mediafire.com/view/?qztf1vp48q8rg7n

    • Thanks for the help with the chart. This paper will go through some major revision after I have a draft of my job market completed, and I will be sure to think about a better way to present the results.

      • jrkrideau says:

        As I said ugly but interesting. It’s a lot better with just points. The Vindex table when graphed looks interesting as well but since I know nothing about the field it may be exactly what is expected.

  3. Steve Sailer says:

    I suspect white Americans tend to have narrower and more self-defined peer groups, while Chinese care more about what their extended families think about them and about making their extended families look good to other extended families. The bestseller “Stuff White People Like” offered countless examples of this phenomenon: white people get into odd, individualistic competitions to have, say, the latest technology in kayaks or whatever, emphasizing distinctions that only other kayak aficionados could possibly care about. Other cultures tend to compete on, say, who can have the biggest wedding. You can see this phenomenon clearly in California life these days.