Webinar by Shihas Abdul Razak

Shihas Abdul Razak is an Academic Associate at the Centre for Public Policy, IIM Bangalore. Previously, he has been associated with the Reserve Bank of India, the Kerala State Planning Board, and the Azim Premji Foundation. He has done his master’s degree from the Centre for Development Studies, Thiruvananthapuram. His research interest lies in areas of Development and Political Economy.

Abstract – Using representative migration survey data from the Indian state of Kerala, this paper assesses the impact of transnational migration on social signaling through the consumption of visible goods. We find significant and positive effects on conspicuous consumption by using the plausibly exogenous variation in migration networks in the neighborhood and religious communities to account for the potential endogeneity. Our further analysis shows that only a modest portion of this migration effect is mediated through the difference in peer or reference group income distribution and knowledge diffusion and changes in preferences of the migrants post-migration. A key channel that we propose through a theoretical framework is a potential information gap among permanent residents about the income levels of a migrant. This, we argue, can be leveraged by migrants to increase visible consumption to gain higher status in society.