The Price of Party Going

Why Frequent Socializing is Bad for the Poor
September 9, 2012

What do droughts, food price spikes, and weddings have in common? They all have the potential to drive poor people further into poverty. A new IFPRI discussion paper reveals that frequent socializing is an unexpected reason why the health of children in impoverished rural China has improved little in past decades despite rapid annual income growth.

The rich aren’t the only members of society who bolster their social standing through material consumption, write Xi Chen, an assistant professor at Yale University, and Xiaobo Zhang, a senior research fellow at FPRI and a professor at Peking University, in the report. The poor in the developing world also seek to establish their status through lavish spending on weddings, funerals, and other rites of passage—as hosts and gift-bearing guests.

“Participating in and presenting gifts at funerals, weddings, and other ceremonies held by fellow villagers have been regarded as social norms in Chinese villages for thousands of years,” Chen and Zhang write in the study.

If villagers don’t “save face” by partaking in these rituals, they risk being ostracized by their neighbors. But with the cost of gifts—from fruit and tea to cigarettes and cash—rising, the burden of attending social events forces poor villagers to cut back on food and other basic needs.

Using primary household survey data from 18 villages in China, Chen and Zhang looked at the impact of frequent social events on pregnant women. They discovered that due to so-called “social spending,” these women eat less food and, as a result, give birth to children with stunted growth.

“We found that children born to households with lower income status develop shorter and lighter physical stature if their home villages held a greater number of social events in the years prior to their birth,” they write.

They suggest that mothers would likely become more anti-social if they knew that attending village events is detrimental to their unborn child. “It is likely that a more informed mother will be more careful in making a choice between eating adequate and healthy foods and attending a neighbor’s social event,” they write.

This study sheds light on the “food puzzle,” a concept first identified by Princeton economics professor Angus Deaton that captures why the nutritional status of the poor in developing countries tends to be stagnant amid rapid income growth. The study also builds on observations by two MIT economics professors, Abhijit Banerjee and Esther Duflo, that many anti-poverty policies have failed because of an inadequate understanding of social customs.