Income Inequality, Material Craving and Entrepreneurial Irrationality ——Shadowing Effect and Regulating Effect Based on Material Craving
XU Qiao-ling1,2
1.School of Economics, Huazhong University of Science and Technology, WuHan 430074, China; 2.Department of Economics&Management, Taiyuan Institute of Technology, Taiyuan 030008, China;
Abstract Using the 2014 data from the China Family Tracking Survey, this paper adopts logit and tobit regression models to test respectively the relationship of income inequality and material craving to entrepreneurship decision and entrepreneurial tensity according to mediation effect test steps. It is found that there is a U-shaped relationship between income disparity and material craving. When the income gap exceeds the inflection point, income inequality is harmful to entrepreneurship whereas material craving stimulates it. In addition, income inequality obscures its harmful effect on entrepreneurship by stimulating material craving and thus promotes irrational entrepreneurship. The empirical results remain robust after replacing the explained variables, and the income inequality indicators. The regression results of subsamples show that there is a U-shaped relationship between rural income gap and material craving and the income gap promotes irrational entrepreneurship in rural areas when it exceeds the inflection point. On the contrary, there is an inverted U-shaped relationship between urban income gap and material craving and the material craving decreases as the income gap rises after the inflection point. The relationship between income gap and entrepreneurship is not overt in urban areas which shows that urban residents show relative rationality on entrepreneurship when facing income gap.
XU Qiao-ling. Income Inequality, Material Craving and Entrepreneurial Irrationality ——Shadowing Effect and Regulating Effect Based on Material Craving. Economic Survey, 2019, 36(3): 0126.
2019, Vol. 36 
