Behavioural Economist Ruins Chinese New Years

Behavioural Economist Ruins Chinese New Years

Happy Chinese New Years! It’s the Year of the Tiger.

I didn’t make anything special, but a good friend invited me over to her friend’s place to make dumplings

I had so much fun!

Also, none of us really knew how to fold dumplings ><

One thing that really struck me about this gathering is how closely they followed tradition: sweeping the floors, decorating with yellow flowers (one of the girls are Vietnamese) and red stickers and waiting for everyone to arrive. I thought it was very sweet that they did this.

Instead of the typical explanation of traditions, I thought I’d do something different

Red Packets– Chinese culture with its many traditions and taboo isn’t exactly known for “efficiency”, but this tradition of giving cash is an economist’s dream!. Cash is the most efficient gift- the recipient gets to choose exactly what would give him/her the most utility. Giving cash still taboo in the US and most of Europe. Let’s change that!

Cleaning (BEFORE) New Years– Superstitions holds that cleaning before the new year “sweeps out” the old. Behavioural science calls this the “fresh start effect”. Cleaning before the new years is a salient reminder to start something new and good motivation to finally find out what’s under the couch.

Red… Red Everywhere– Chinese people believe that red is good luck. It might bring good luck if looking confident and somewhat intimidating gets you what you want. That’s right! There are studies showing that red signals authority (even in monkeys!)

Family Time– Chinese New Years is all about spending time with family, especially those older or more distant ones. This tradition is especially important these days as fewer and fewer people live in extended households. Studies show that loneliness doesn’t just affect mental health, it’s also been shown to increase risk of cancer, decrease immune function and speed up cognitive decline. As demographic transition increases the number of elderly, it’s important to do whatever possible to keep them healthy and happy

Buying New Stuff– In the past, the New Years was the one time families get new things. This is clearly no longer the case for much of China, but the tradition of consumption has ballooned with the economy. At the peak in 2019, spending totaled to 1TRILLION RMB, NOT including money spent on travel. This took a hit during COVID, but spending came back with a vengeance in 2021 and is sure to get closer to catching up this year.

I hope everyone enjoyed this less traditional take on a CNY post!

HAPPY YEAR OF THE TIGER!! Happiness and prosperity to all!

2 thoughts on “Behavioural Economist Ruins Chinese New Years

  1. Just saw this post! Happy Chinese New Year! so great you can celebrate it together with friends, Tradition is so important, and you are viewing it from economist’s perspective, thumbs up!

    Like

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