The paper “Income inequality, consumption, and social-status seeking” was published in the Journal of Comparative Economics, Issue 39, 2011. It analyzes whether and how income inequality affects family consumption, based on survey data of Chinese urban households. As it finds out, as income disparity widens, families in China tend to significantly reduce consumption and increase investment in education. This is especially true for families with low income and young parents. It is further discovered that families deliberately do so in order to escalate their social status, intending to harvest material and non-material benefits. The widening income disparity implies richer benefits once a family reaches a higher social ladder, which in turn requires higher entry hurdle and more investment. All these motivate households to save and invest in order to escalate social status. Empirical findings show that widening income disparity explains 23% of reduction in average propensity to consume of Chinese urban households between 1997 and 2006.