Do All Networks ‘Work’? The Mediating Role of Social Networks on Consumption Expenditure in India

Abstract

The article sheds light on the mediating role of social networks on consumption behaviour, a significant facet of social mobility and well-being. Based on the Indian Human Development Survey, the article explores to what extent households across India participating in social networks have increased their consumption levels. While participation in formal social networks does result in improved household consumption levels, the type and number of networks are pivotal to this change. Nevertheless, not all networks lead to similar effects, although the number of social networks per se has a positive effect on consumption. Furthermore, the networks based on homogeneous groups, such as women’s self-help groups, have a negative or lesser effect on smoothing consumption, while those affiliated with heterogeneous networks have a positive effect on increasing consumption.