Class, caste and conspicuous consumption in India

Abstract

Using nationally representative household-level panel data from India, we study status-signalling through conspicuous consumption across castes, religions and income classes. Conditional on permanent income, scheduled caste (SC) and scheduled tribe (ST) Hindu households spend more, while religious minorities spend less on visible consumption compared to upper-caste Hindus. There is no significant difference between the visible expenditures of the upper-caste and the otherwise backward caste (OBC) Hindus. Lower-income households spend more on conspicuous consumption than their richer counterparts, regardless of caste and religion. Conspicuous spending is higher during festivals and periods of above-average household income, but lower in areas with higher visible inequality. Among OBCs, SCs and Muslims, visible spending is higher among those receiving government transfers than those without public transfer income.