Participating in and presenting gifts at funerals, weddings, and other ceremonies held by friends and neighbors have been regarded as social norms in many parts of the world for thousands of years. However, due to the reciprocal nature of gift giving, it is more burdensome for the poor to take part in these social occasions than for the rich. Because the poor often lack the necessary resources, they are forced to cut back on basic consumption, such as food, in order to afford a gift to attend the social festivals. For pregnant women in poor families, such a reduction in nutrition intake as a result of gift-giving can have a lasting detrimental health impact on their children. Using a primary census-type panel household survey in rural China, this paper provides empirical evidence on the squeeze effect of gift giving.
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