Discussion of the gift-giving behavior in rural and urban area respectively: Empirical evidence in China

Abstract

Sending gifts in specific festivals and events is a universal phenomenon. One major concern is the motivations behind the sizable and significant gift expenses. The purpose of this research is to compare the gift-giving motives between rural and urban households. Three hypotheses are formulated: baseline altruism hypothesis, social norm hypothesis, and continuation reciprocity hypothesis. All these hypotheses are then tested empirically base on the data from the 2010 China Family Panel Studies Survey (CFPS). The results show that urban households are more motivated by the social norm and baseline altruism, while rural households are more motivated by continuation reciprocity. To further assess the motivations for different income groups, the threshold regression model is applied. The estimates suggest distinct motives between the relatively higher income group and relatively lower income group. The results show that households in the relatively lower income group are not motivated by social norm motive at all. Instead, the continuation reciprocity motive seems to be dominating for them. These findings demonstrate that households in the urban and rural area with different income level react to gift-giving differently.