Using a micro data from Bangladesh, this paper tests whether an extended family in low-income countries is altruistically linked. Based on theoretical implications of altruism model, the paper tests whether interhousehold transfer is negatively related to the recipient's income and whether consumption of each of related households is uncorrelated with its own income, controlling for pooled income of the family. Test results do not support altruism as the basis for familial economic ties in low-income countries. We fail to reject that transfer from father, child, or sibling is uncorrelated to the recipient's income or wealth in most cases; and households' non-food consumption is estimated to be strongly correlated with their own income and wealth, even after related households' pooled income is controlled for.
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Paper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number
wp0107.
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Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1985.
"The Strategic Bequest Motive,"
Journal of Political Economy,
University of Chicago Press, vol. 93(6), pages 1045-76, December.
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Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986.
"The Strategic Bequest Motive,"
Journal of Labor Economics,
University of Chicago Press, vol. 4(3), pages S151-82, July.
[Downloadable!] (restricted)