Everyone likes to receive a present, but for some in rural China and other regions of the world, cultural norms surrounding gift exchange are contributing to widespread poverty and even playing a role in poor health.
A new study into pervasive scarcity in the Chinese countryside found that many people with marginal means often spend, sometimes lavishly, more than they can afford on social events such as weddings, funerals and other public commemorations where their name and family reputation are perceived to be at stake.
The analysis conducted by Xi Chen, an assistant professor at the Yale School of Public Health, and colleagues examined gift-giving practices in several rural villages and found that many people in these tight-knit communities are driven to spend more than they can afford by peer pressure and concern for status.
Excessive gifting is pronounced enough that in some cases it comes at the expense of being able to provide basic nutrition and other health needs for immediate family members. This, in turn, forces family to get by with less, including pregnant women who then give birth to a child who is affected developmentally. Chen and his colleagues have found that the recovery from intense in utero exposure to costly social events has been rather minimal in the long run.
Poorer families in rural China, in many cases, spend more of their resources on gifts than do their wealthy counterparts and, the study suggests, the rate of such spending is increasing. Despite a growing and even robust economy that has improved the standard of living for many Chinese, many people in rural regions continue to struggle to meet their basic needs.
“This study sheds light on the puzzle why the nutritional status of the poor in developing countries tends to be stagnant amid rapid income growth,” said Chen. “The next essential step is to explore the dynamic evolution of social networks and understand who triggered the arms race.”
Part of what is driving the escalating spending is China’s tightening marriage market; in many areas there are more men than women. For families with eligible sons, social status is viewed as an important factor and prompts families to spend more than they can afford in the hope of enhancing their reputation and their son’s appeal to potential brides. The large social spending, in this context, serves as an important signal to matchmakers that help ensure the relative standing.
The capability and motive for lavish social spending is further amplified by massive windfall income and other opportunities amid China’s rapid development. Though received by only some households, their effects spill over to peers and contribute to the escalation in gift expenditures.
Gift giving is also reciprocal. If someone receives a generous gift, there is pressure for them to follow suit with something of equal or greater value, triggering, in effect, an escalation that many parties cannot afford.
Chen said that anti-poverty measures in China and other locations in the world need to take into account cultural norms and practices if they are to be truly effective.
Ravi Kanbur, an economics professor at Cornell University, and Xiaobo Zhang, a senior research fellow at International Food Policy Research Institute (IFPRI) and professor of economics at Peking University, co-authored the study.