Spending on celebrations, parties and gifts by the poor in China has shot up over recent years. The idea is to raise your status in your village.
Together with co-author X. Zhang of the International Food Policy Research Institute, Bulte researched the spending habits of residents of 26 villages in a poor province of inland China. 'The villagers carefully recorded all the spending in exercise books, so that they knew exactly what you had had and from whom', says Bulte. A statistical analysis revealed that in recent years the villagers have been spending more and more on social activities such as weddings, funerals and birth celebrations. The number of festivals has grown too. 'People spend freely because others in the village are doing so too.'
Bulte's guess is that migration of villagers to the booming cities of the coastal provinces has boosted spending in the villages. 'Previously, the relative status of villagers was stable. Then migrants started to send money from the cities and families had a chance to raise their status. That is very important in Chinese society, because it determines things like your child's chances on the marriage market. Almost all marriages are arranged by the family. So status is very important, certainly for your son, since there is a shortage of women.'
Poorer members of the community, who don't get remittances from the city, desperately try to keep up with the spending craze: 'They don't want to get left behind.' Bulte has heard stories about villagers selling their blood, which is illegal, to get hold of some extra money for throwing parties to raise their status. 'The problem is that the poor then use a larger proportion of their income for non-productive ends', Bulte concludes. 'And it doesn't even help, since everyone is doing it.' He sees a big social divide coming in rural China.