  Using representative migration survey data from the Indian state of Kerala,
this paper assesses the impact of transnational migration on social signaling
through the consumption of visible goods. Using the plausibly exogenous
variation in migration networks in the neighborhood and religious communities
to account for the potential endogeneity, we find significant and positive
effects on conspicuous consumption. In terms of the mechanisms, we put forward
three possible channels. While we are unable to rule out the associated changes
in preferences driving up the spending on status goods, we observe only modest
effects of peer group spending due to higher status competition. A key channel
that we propose through a theoretical framework is a potential information gap
among permanent residents about the income levels of a migrant. This we argue
can be leveraged by migrants to increase the visible consumption to gain higher
status in the society.
