Keeping up with the Patels: Conspicuous consumption drives the adoption of cars and appliances in India

TY - JOUR

T1 - Keeping up with the Patels

T2 - Conspicuous consumption drives the adoption of cars and appliances in India

AU - Ramakrishnan, Anjali

AU - Kalkuhl, Matthias

AU - Ahmad, Sohail

AU - Creutzig, Felix

N1 - © 2020 The Authors Funding Information: Authors are thankful to Barbora Sedova for her help with the IHDS data. Anjali Ramakrishnan thanks German Academic Exchange Service (57299294) for financial support. Sohail Ahmad's acknowledges funding received via UK Research and Innovation, and administered through the Economic and Social Research Council, as part of the UK Government's Global Challenges Research Fund (Ref: ES/P011020/1).

PY - 2020/12/1

Y1 - 2020/12/1

N2 - End-users base their consumption decisions not only on available budget and direct use value, but also on their social environment. The underlying social dynamics are particularly important in the case of consumer goods that implicate high future energy demand and are, hence, also key for climate mitigation. This paper investigates the impact of social factors, with a focus on ‘status perceptions’, on car and appliance ownerships by urban India households. Using two rounds of the household-level data from the India Human Development Survey (IHDS, 2005 and 2012), we test for the impact of social factors in addition to economic, demographic, locational, and housing on ownership levels. Starting with factor analysis to categorise appliances by their latent characteristics, we then apply the bivariate ordered probit model to identify drivers of consumption among the urban households. We find that while income and household demographics are predominant drivers of car and appliance uptake, the household's perception of status, instrumented by a variable measuring expenditure on conspicuous consumption, emerges as a key social dimension influencing the uptake. The results indicate how households identify themselves in society influences their corresponding car and appliance consumption. A deeper understanding of status-based consumption is, therefore, essential to designing better demand-side solutions to low-carbon consumption.

AB - End-users base their consumption decisions not only on available budget and direct use value, but also on their social environment. The underlying social dynamics are particularly important in the case of consumer goods that implicate high future energy demand and are, hence, also key for climate mitigation. This paper investigates the impact of social factors, with a focus on ‘status perceptions’, on car and appliance ownerships by urban India households. Using two rounds of the household-level data from the India Human Development Survey (IHDS, 2005 and 2012), we test for the impact of social factors in addition to economic, demographic, locational, and housing on ownership levels. Starting with factor analysis to categorise appliances by their latent characteristics, we then apply the bivariate ordered probit model to identify drivers of consumption among the urban households. We find that while income and household demographics are predominant drivers of car and appliance uptake, the household's perception of status, instrumented by a variable measuring expenditure on conspicuous consumption, emerges as a key social dimension influencing the uptake. The results indicate how households identify themselves in society influences their corresponding car and appliance consumption. A deeper understanding of status-based consumption is, therefore, essential to designing better demand-side solutions to low-carbon consumption.

KW - Appliance diffusion

KW - Car ownership

KW - Energy policy

KW - Perceived socioeconomic status

KW - Residential energy demand

KW - Social drivers

UR - http://www.scopus.com/inward/record.url?scp=85090330394&partnerID=8YFLogxK

U2 - 10.1016/j.erss.2020.101742

DO - 10.1016/j.erss.2020.101742

M3 - Article

AN - SCOPUS:85090330394

SN - 2214-6296

VL - 70

JO - Energy Research and Social Science

JF - Energy Research and Social Science

M1 - 101742

ER -