Diaspora Transferts et Signal de Richesse

Diaspora Transferts et Signal de Richesse

This paper shows that social interactions can induce families of migrants to care about hierarchical social status because it serves as a signal device of non-observable income. Hence , a concern for social status induces theses families to engage in conspicuous consumption in order to signal their relative wealth. Consequently, the model shows a positive correlation between disposable income and consumption of the positional good . As a corollary, families who receive large remittances tendto invest more in the signaling game of wealth.