Xi Chen (Yale University) presented a fascinating paper at the recent ASE/ASSA meetings in San Diego (co-author Xiaobo Zhang of the International Food Policy Research Institute and Peking University).
"Costly Posturing: Relative Status, Ceremonies and Early Child Development" explores the relationship between social behaviors and economic and health outcomes. In particular, it examines how public ceremonies such as funerals, weddings, home blessings, and other events negatively affect substantive measures of human well-being -- specifically by caloric intake and malnutrition. People feel intense social pressure to participate in these social rituals even when it detracts from the well-being of their own children.
The authors present evidence that in rural areas of China, poor families spend more on gifts than do the richest families-- creating what the authors call "squeeze effects". The impact of this is statistically observed on children who are in utero at the time of the ceremonies.
This is counter to what one normally thinks, which is that social events tend to be redistributive. For example, in the highlands of Guatemala, ceremonies are paid for disproportionately by wealthier villagers. Such ceremonies serve to redistribute wealth in society according to a cosmic vision of what promotes justice in the circumstances. (See: Blevins, Ramirez, and Wight, "Ethics in the Mayan Marketplace," in Mark D. White, ed., Accepting the Invisible Hand: Market-Based Approaches to Social-Economic Problems(Palgrave Macmillan, 2010, pp. 87-110).
These findings also appear to contradict Confucian beliefs about the duty of a leader to provide for those in a lower hierarchy. It may be that these data can be explained by arguing that poor people have to try harder to make an impression and gain status. Hence, they give larger gifts.
Adam Smith noted that it is not simply the rich who are interested in status. Writing in The Wealth of Nations, Smith noted that:
"By necessaries I understand, not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life…. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in publick without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty, which, it is presumed, nobody can well fall into without extreme bad conduct. (566)"
What is not in the paper is a broader general analysis that would examine whether social affiliations provide important pay-backs over many decades to the wider group. That is, social events during hard times may injure an in-utero baby. But being part of the social group may confer advantages to other siblings in terms of jobs and marriages.
This was a highly stimulating paper and a remarkable attempt to understand the link between status spending and negative health indicators in poor communities.