[en] Even under the direst necessity, Indian households do not seem to spend their budget in
a rational of survival: households from lower castes choose to consume less food and more
visible items than similar households from high castes, and this difference is stronger for
the poor. Using variations in upper caste wealth across regions, we show that disadvantaged
castes substitute visible consumption for food when upper castes are relatively richer. In
regions where Upper Castes are twice richer, low caste households spend up to 8% more
on visible and similarly less on food. For households under $2 dollars a day, it corresponds
to a daily budget reallocation of 15 dollar cents. We argue that consumption choices can
be partly explained by a preference for status, which depends on inequality between caste
groups. Importantly, preferences are upward-looking between castes: the high caste is
society’s reference group, and households outside of the caste system are not affected by it.
Our results are not driven by general equilibrium effects on prices and no similar effect is
observed on other expenditures. They underline the relevance of caste-targeted policies in
the process of development.