Conspicuous consumption and donation in China

Abstract

Conspicuous consumption has been widely studied, but the study of its correlation to benevolence is scarce. To expand the understanding on conspicuous consumption, this paper offers a detailed study of the consumption of consumer goods that are driven by status; implying that products are purchased not for its utility but for prestige. It determines the concept of conspicuous consumption by studying the effects that different household income levels have on various categories of consumption. The correlation of conspicuous consumption and its relationship to charitable behavior will be examined. The study result indicates a positive correlation between income and conspicuous consumption. Individual experiments on different income groups indicate that in the rural and urban regions of China, income levels have a positive correlation with donation in the low, middle and high income groups. Conversely, when data was studied in the urban sector as a whole across all three income groups, income and conspicuous consumption have a significant positive influence on donation. This is similar to the rural sector, where a higher conspicuous consumption leads to an increase in donation. However, income level in the rural region proved to have no significant influence on donation. The overall findings suggest that the main influence on donation on China is income and conspicuous consumption.

Keywords: conspicuous consumptions, donations, households, income, expenditures