Hostname: page-component-586b7cd67f-gb8f7 Total loading time: 0 Render date: 2024-11-29T18:20:27.219Z Has data issue: false hasContentIssue false
  • English
  • Français

Money or in-kind gift? Evidence from red packets in China

Published online by Cambridge University Press:  06 November 2019

Marek Hudik Open the ORCID record for Marek Hudik [Opens in a new window]  and
Eddy S. Fang
Marek Hudik*
Affiliation:
Faculty of Business Administration, University of Economics, Prague, Prague, Czech Republic
Eddy S. Fang
Affiliation:
International Business School Suzhou, Xi'an Jiaotong-Liverpool University, Suzhou, China
*
*Corresponding author. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

In Western societies, in-kind gifts are generally more common than money gifts. However, exchange of in-kind gifts potentially involves inefficiency. Several models have been suggested to explain the in-kind gift-giving practice as a rational behaviour under certain assumptions about givers’ preferences and information and/or technological constraints. Unlike many Western societies, China has a long tradition of money gift-giving. So-called red packets are commonly exchanged. We argue that models developed to rationalise Western norms of gift-giving cannot fully account for Chinese gift-giving practices, and some Chinese practices even contradict existing theories. We collect Chinese household data through two surveys to establish stylised facts about gift-giving. We find that money gifts are commonly appropriate, depending on the occasion and relationship between givers and receivers. Moreover, for every occasion and relationship, money is more appropriate than gift vouchers. Finally, unlike studies focusing on Western gift-giving, our study finds no evidence that givers need to compensate receivers with higher value when giving money gifts rather than in-kind gifts. Our results are consistent with the view that the acceptability of money vis-à-vis in-kind gifts is governed primarily by social convention rather than information and technological constraints or the specific preferences of givers.

Keywords

In-kind giftsmoney giftsred packetsgift-giving normsChina
Type
Symposium on Institutional Analysis and the Gift
Information
Journal of Institutional Economics , Volume 16 , Issue 5 , October 2020 , pp. 731 - 746
Copyright
Copyright © Millennium Economics Ltd 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bicchieri, C. (2017), Norms in the Wild: How to Diagnose, Measure, and Change Social Norms, New York: Oxford University Press.CrossRefGoogle Scholar
Burke, M. A. and Young, H. P. (2011), ‘Social Norms’, in Benhabib, J., Bisin, A. and Jackson, M. O. (eds), Handbook of Social Economics, vol. 1, North-Holland: Elsevier, pp. 311–38.Google Scholar
Camerer, C. (1988), ‘Gifts as Economic Signals and Social Symbols’, American Journal of Sociology, 94: S180–214.CrossRefGoogle Scholar
Caplow, T. (1982), ‘Christmas Gifts and Kin Networks’, American Sociological Review, 47(3): 383–392.CrossRefGoogle Scholar
David, P. A. (1994), ‘Why are Institutions the “Carriers of History”? Path Dependence and the Evolution of Conventions, Organizations and Institutions’, Structural Change and Economic Dynamics, 5(2): 205–220.CrossRefGoogle Scholar
Elder-Vass, D. (2019), ‘Defining the Gift’, Journal of Institutional Economics, available at https://www.cambridge.org/core/journals/journal-of-institutional-economics/article/defining-the-gift/9C72EA999F8879E8B43921FC36C9037A (accessed 11 April 2019).Google Scholar
Flynn, F. J. and Adams, G. S. (2009), ‘Money Can't Buy Love: Asymmetric Beliefs about Gift Price and Feelings of Appreciation’, Journal of Experimental Social Psychology, 45(2): 404–409.CrossRefGoogle Scholar
Greif, A. and Laitin, D. D. (2004), ‘A Theory of Endogenous Institutional Change’, American Political Science Review, 98(4): 633–652.CrossRefGoogle Scholar
Heikkila, E. J. (2011), ‘An Information Perspective on Path Dependence’, Journal of Institutional Economics, 7(1): 23–45.CrossRefGoogle Scholar
Henrich, J., Boyd, R., Bowles, S., Camerer, C., Fehr, E. and Gintis, H. (eds) (2004), Foundations of Human Sociality: Economic Experiments and Ethnographic Evidence from Fifteen Small-scale Societies, New York: Oxford University Press.CrossRefGoogle Scholar
Herrmann-Pillath, C., Feng, X. and Guo, M. (2019), ‘Entrepreneurs and Ritual in China's Economic Culture’, Journal of Institutional Economics, pp. 1–15, available at https://www.researchgate.net/publication/332972491_Entrepreneurs_and_ritual_in_China's_economic_culture (accessed 11 April 2019).CrossRefGoogle Scholar
Ikels, C. (2004), Filial Piety: Practice and Discourse in Contemporary East Asia, Redwood, CA: Stanford University Press, Redwood.Google Scholar
Kaplan, T. and Ruffle, B. (2009), ‘In Search of Welfare-improving Gifts’, European Economic Review, 53(4): 445–60.CrossRefGoogle Scholar
Kipnis, A. B. (1996), ‘The Language of Gifts: Managing Guanxi in a North China Village’, Modern China, 22(3): 285–314.CrossRefGoogle Scholar
Leeson, P. T. (2019), ‘Logic is a Harsh Mistress: Welfare Economics for Economists’, Journal of Institutional Economics, pp. 1–6, available at https://www.cambridge.org/core/journals/journal-of-institutional-economics/article/logic-is-a-harsh-mistress-welfare-economics-for-economists/377AAD4CE3AE2176FBAF67221D08B7EF (accessed 11 April 2019).Google Scholar
Mankiw, N. G. (2018). Principles of Economics, Boston, MA: Cengage Learning.Google Scholar
Mortelmans, D. and Sinardet, D. (2004), ‘Reflecting Culture and Society? Norms and Rules Governing Gift-giving Practices’, The Netherlands’ Journal of Social Sciences, 40(2): 176–201.Google Scholar
North, D. C. (1990), Institutions, Institutional Change and Economic Performance, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Posner, E. A. (1997), ‘Altruism, Status, and Trust in the Law of Gifts and Gratuitous Promises’, Wisconsin Law Review, 567.Google Scholar
Prendergast, C. and Stole, L. (2001), ‘The Non-monetary Nature of Gifts’, European Economic Review, 45(10): 1793–1810.CrossRefGoogle Scholar
Principe, K. E. and Eisenhauer, J. G. (2009), ‘Gift-giving and Deadweight Loss’, Journal of Behavioral and Experimental Economics, 38(2): 215–220.Google Scholar
Robben, H. S. J. and Verhallen, T. M. M. (1994), ‘Behavioral Costs as Determinants of Cost Perception and Preference Formation for Gifts to Receive and Gifts to Give’, Journal of Economic Psychology, 15(2): 333–350.CrossRefGoogle Scholar
Ruan, J. (2017), ‘Guanxi and Social Capital’, in Guanxi, Social Capital and School Choice in China, Palgrave Studies on Chinese Education in Global Perspective, Cham: Palgrave Macmillan, pp. 37–73.CrossRefGoogle Scholar
Siu, K. W. M. (2001), ‘Red Packet: A Traditional Object in the Modern World’, Journal of Popular Culture, 35(3): 103–125.CrossRefGoogle Scholar
Smart, A. (1993), ‘Gifts, Bribes, and Guanxi: A Reconsideration of Bourdieu's Social Capital’, Cultural Anthropology, 8(3): 388–408.CrossRefGoogle Scholar
Smith, N., Sabat, I., Martinez, L., Weaver, K. and Xu, S. (2015), ‘A Convenient Solution: Using MTurk to Sample from Hard-To-Reach Populations’, Industrial and Organizational Psychology, 8(2): 220–228.CrossRefGoogle Scholar
Tremblay, C. H. and Tremblay, V. J. (1995), ‘Children and the Economics of Christmas Gift-giving’, Applied Economics Letters, 2(9): 295–297.CrossRefGoogle Scholar
Waldfogel, J. (1993), ‘The Deadweight Loss of Christmas’, American Economic Review, 83(5): 1328–1336.Google Scholar
Waldfogel, J. (2002), ‘Gifts, Cash, and Stigma’, Economic Inquiry, 40(3): 415–427.CrossRefGoogle Scholar
Webley, P. and Wilson, R. (1989), ‘Social Relationships and the Unacceptability of Money as a Gift’, Journal of Social Psychology, 129(1): 85–91.CrossRefGoogle Scholar
Webley, P., Lea, S. E. G. and Portalska, R. (1983), ‘The Unacceptability of Money as a Gift’, Journal of Economic Psychology, 4(3): 223–238.CrossRefGoogle Scholar
Woo, S., Keith, M. and Thornton, M. (2015), ‘Amazon Mechanical Turk for Industrial and Organizational Psychology: Advantages, Challenges, and Practical Recommendations’, Industrial and Organizational Psychology, 8(2): 171–179.CrossRefGoogle Scholar
Wu, Z. and Ma, S. (2017), ‘Money as a Social Currency to Manage Group Dynamics: Red Packet Gifting in Chinese Online Communities’, Proceedings of the 2017 CHI Conference Extended Abstracts on Human Factors in Computing Systems, 6–11 May, Denver, pp. 2240–2247.CrossRefGoogle Scholar
Yan, Y. (1996), The Flow of Gifts: Reciprocity and Social Networks in a Chinese Village, Redwood: Stanford University Press.Google Scholar
Young, H. P. (1996), ‘The Economics of Convention’, Journal of Economic Perspectives, 10(2): 105–22.CrossRefGoogle Scholar
Zelizer, V. A. (1994), The Social Meaning of Money: Pin Money, Paycheck, Poor Relief, and Other Currencies, New York: Basic Books.Google Scholar