The Culture that is China: Pimp My Ride Edition

My latest research paper (downloadable here) with my friend and colleague Daniel Hicks and my grad student Weici Yuan, studies how skewed sex ratios in China help promote conspicuous consumption in unmarried Chinese men.

It seems impossible, but there are parts of China where there are 132 men for every 100 women.  YIKES! Thats a heck of a policy, that one child policy (especially when combined with strong preferences for male children).

We study automobile purchases and use a diff in diff in diff approach to identify the effect. Here is the most basic results with no controls:

ddd graph

So going from the quartile with the most balance sex ratios to that with the most skewed raises the car spending of unmarried men by 7200 RMB or around $1200.

We also show that this status competition results in increased purchases of cars with lower gas milage and higher vehicle weight, meaning that it also creates negative externalities.