Wedding Celebrations as Conspicuous Consumption

Abstract

We examine the determinants of expenditures on wedding celebrations by rural Indian families. We develop a status signaling model of wedding celebrations where the size of the celebration signals the quality of the new groom9s family and, thus, the enhanced social status of the bride9s family. Predictions from the model are tested with survey data from South India using a natural experiment derived from variations in norms of village exogamy—when daughters have to marry grooms from another village—to identify the availability of information on the groom9s family to the bride9s village. The econometric results are consistent with a status signaling interpretation.