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June 2016
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Ankur Sarin is faculty in the Public Systems Group. He currently teaches courses in Public Policy, Microeconomics, Social Entrepreneurship and Program Evaluation. His areas of research interests include understanding the impact of technology on the lives of the poor. asarin@iima.ac.in
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Conspicuous Consumption and Income Inequality in an Emerging Economy: Evidence from IndiaIn Marketing Letters, 26(3), February 4, 2015, 279-292Ankur Sarin and Saravana Jaikumar The impact of income inequality on conspicuous consumption
has been a topic of much discussion, but little empirical examination in the
emerging market context. In this paper, using data from the India Human
Development Survey (2004–2005) and employing simple regression framework, we
examine the effect of income inequality on conspicuous consumption in Indian
households. We also empirically examine whether the relationship between
inequality and conspicuous consumption changes with a household’s relative
wealth status. Drawing on existing literature, we hypothesize that low-income
and rural groups are likely to engage in higher conspicuous consumption due to
the reduced attractiveness of alternate mechanisms to signal status (like
professional titles and educational qualifications) as well as the absence of
well-functioning financial institutions that might inhibit “status seeking”
savings. Consistent with this hypothesis, our results suggest that increased
income inequality is associated with an increased spending on conspicuous
consumption as a share of total spending, with the associated response being
higher for relatively low-income households and those living in rural settings.
Our findings have significant policy and marketing implications in emerging
markets like India.
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Abstracts of other articles published in refereed journals included in this issue
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Debjit Roy, Fabiana Tornese, Andres L. Carrano, Brian K. Thorn and Jennifer A. Pazour
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Ernesto Noronha, Premilla D’Cruz and Sarosh Kuruvilla
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Neharika Vohra and Rahul Chandra Sheel
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Poornima Varma and Akash Issar
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Jamus Jerome Lim and Sanket Mohapatra
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Rajesh Chandwani and Rahul Dey
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Viswanath Pingali, Federico Boffa and Francesca Sala
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Navdeep Mathur, Sejal Patel and Richard Sliuzas
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Sachin Jayaswal, Navneet Vidyarthi and Vikranth Babu Tirumala Chetty
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Viswanath Pingali and Ratul Lahkar
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Amit Karna, Christian Landau and Miriam Sailer
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Manish Aggarwal and Madasu Hanmandlu
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