How rural-urban identification influences consumption patterns? Evidence from Chinese migrant workers

Abstract

Purpose – The purpose of this paper is to examine spending pattern of Chinese migrant workers from rural regions to urban cities from a social identity perspective, which stems from Chinese Hukou system (household registry system). This study proposes a theoretical model for consumer utility function (a combination of economic utility and social utility) which takes into account the choice of social identification. Design/methodology/approach – This study focusses on the influence of rural and urban identification on consumption patterns of Chinese migrant workers. These assumptions were verified based on a survey with 650 samples in Shanghai, one of the most developed cities in China. Findings – Results indicate that affirmative social identification has a significantly positive effect on the level of consumption for migrant workers. High level of rural identification has a more significant impact than urban identification on survival consumption including food, medicine and family support. On the other hand, high level of urban identification has a more significant impact than rural identification on development consumption including education for children, training and recreation. Besides, there are significant interaction effects between income and identity on consumption, which confirms the identity effect on classical economic model and is in line with identity economics’ arguments. Originality/value – This study outlines the importance of social identity in both economics and marketing domains and proposes a theoretical model which advances understanding of a model on similar lines proposed by Akerlof and Kranton’s (2000) and Benjamin et al. (2010). Empirical tests with Chinese migrant workers’ data present that their consumption patterns are influenced by their level of social identifications.