Files
Abstract
Though social spending facilitates risk‐pooling in the impoverished regions, too many resources
devoted to social occasions may impose negative externalities and hinder efforts to alleviate
poverty for households living close to subsistence. Conducting three waves census‐type panel
survey in rural western China with well‐defined reference groups and detailed information on
social occasions, gift exchanges, nutrients intake and health outcomes, we find that the
squeeze effect originated from lavish ceremonies is associated with lower height‐for‐age zscore,
higher probability of stunting and underweight in early child development. The lasting
impact suggests that “catch up” is limited. The squeeze is stronger for the fetal period and
towards the lower tail of the distribution. Specifically, 39.2%, 33.3% and 64.6% of the sampled
households suffer from net squeeze effect on stunting, underweight and lower height‐for‐age zscore,
respectively. The squeeze effect is stronger for 1‐3 age cohorts and between 2007 and
2009. We provide suggestive evidence on the intermediate pathways linking social events with
poor health outcomes, such as share of food expenditure and basic nutrients intake. Our
findings suggest more efficient policy interventions that target the households with pregnant
women and of lower social rankings.