Income inequality, consumption, and social-status seeking

Jin, Y.; Li, Hongbin; Wu, Binzhen

doi:10.1016/j.jce.2010.12.004

Cited by 88 publications

(75 citation statements)

References 32 publications

(35 reference statements)

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“…Due to its relation with educational success, an initial increase in transitory earnings dispersion can quickly turn into higher individual lifetime inequality and further reduced intergenerational mobility. Jin et al (2011), using household data for 1997 to 2006, present direct econometric evidence that rising inequality has positively affected household savings even when controlling for other potential explanatory factors discussed above. Their estimations explain consumption (net of education expenditures) and the average propensity to consume (ratio of consumption to disposable income) with household income, a set of control variables (such as age, family size, province and year dummies, time trends, house prices, the estimated returns on education) and a measure for income inequality.…”

Section: Rising Income Inequality and Status-seeking Through Wealth Amentioning

confidence: 88%

From internal imbalances to global imbalances: a survey on the causes of China’s export-led growth

Sturn

2014

China Economic Journal

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There is a broad consensus that China's export-and investment-led growth model is unsustainable and therefore needs to become more balanced. In the public debate, Chinese exchange rate interventions are mostly made (solely) responsible for this. But it is unclear whether and how much the Renminbi is undervalued, and if an exchange rate appreciation helps to reduce China's current account surplus significantly. This survey reviews the international literature on China's export-oriented growth model. Structural internal imbalances in the Chinese economy, resulting in an extremely low consumption-to-GDP share by historical and international standards play hereby a central role. Related to this are: 1.) the drop in household and wage income as a share of GDP and low employment growth, and its impact on consumption demand; 2.) the increase in income uncertainty and inequality, and its impact on household savings; and 3.) the role of government spending, i.e. high and increasing public surpluses. The central policy challenge is therefore to increase household incomes, and to reduce income inequality and uncertainty.

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Section: Rising Income Inequality and Status-seeking Through Wealth Amentioning

confidence: 88%

From internal imbalances to global imbalances: a survey on the causes of China’s export-led growth

Sturn

2014

China Economic Journal

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“…We illustrate the non-negligibility of the sampling error with two empirical examples. Using the same data as in Jin et al (2011) and Wei and Zhang (2011), we find evidence that the OLS estimator is substantially different from its adjusted version that takes sampling error into account.…”

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confidence: 89%

“…The parameter β is of interest, see, e.g., Barro (2000). Besides the effect of income inequality on economic growth, this model is similarly applied to analyze the effect of inequality on consumption, investment, migration, and health, see, e.g., Atkinson and Brandolini (2001), Alesina and Angeletos (2005) and Jin et al (2011). In all of these studies, the population Gini coefficient is unknown, so empirical researchers have to work with the sample Gini coefficient denoted asα i , which is an estimator for the population Gini α i in the ith group.…”

Section: Example I: Ginimentioning

confidence: 99%

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Linear regression with an estimated regressor: applications to aggregate indicators of economic development

Meng

Zhan

2015

Empir Econ

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This study examines the consequences of using an estimated aggregate measure as an explanatory variable in linear regression. We show that neglecting the seemingly small sampling error in the estimated regressor could severely contaminate the estimates. We propose a simple statistical framework to account for the error. In particular, we apply our analysis to two aggregate indicators of economic development, the Gini coefficient and sex ratio. Our findings suggest that the impact of the estimated regressor could be substantially underestimated, when the sampling error is not accounted for.

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Economic inequality and entrepreneurship: Micro‐evidence from China

Xie

Zhou

2022

Strategic Entrepreneurship

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Research Summary: This paper develops a theoretical explanation for why economic inequality may affect individuals' decision to engage in entrepreneurial activities. We argue that inequality may have a positive impact on entrepreneurship because it triggers social comparison, thus motivating individuals to become entrepreneurs. Moreover, such effect is stronger for people in the middle economic status group than for those in the top or bottom groups, as middle economic status group has both the motivation and capability to take entrepreneurial actions. We use a sample of 3,879 Chinese households from 2010 to 2018 and merge them with countylevel variables to test our hypotheses. The results support our hypotheses and remain consistent across different model specifications, including models controlling for the potential endogeneity between inequality and entrepreneurship.

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Income inequality, consumption, and social-status seeking

Cited by 88 publications

References 32 publications

From internal imbalances to global imbalances: a survey on the causes of China’s export-led growth

From internal imbalances to global imbalances: a survey on the causes of China’s export-led growth

Linear regression with an estimated regressor: applications to aggregate indicators of economic development

Economic inequality and entrepreneurship: Micro‐evidence from China

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