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Remit for what? The Impact of Information Asymmetries in Transnational Households

Author

Listed:
  • Giuseppe De Arcangelis

    (Dipartimento di Scienze Sociali ed Economiche, Sapienza-Università di Roma)

  • Majlinda Joxhe

    (CREA Center for Research in Economic Analysis University of Luxembourg)

  • Dean Yang

    (Department of Economics and Gerald R. Ford School of Public Policy, University of Michigan)

Abstract

The main purpose of this paper is to check whether information asymmetry may affect the allocation of a given budget between in-kind consumption-type goods and in-kind investment-type choices. In order to test the model, we use the results of a lab-in-the-field experiment where migrants engage in a dictator game and are asked to earmark a given budget between consumption and investment goods to be delivered to the most closely connected household (MCCH). Three different scenarios of information sharing with the MCCH on the choices made by the migrant are considered – private information, full information sharing and information sharing with a social excuse for investment goods. Empirical results confirm that under private information investment goods are preferred, whereas under full information sharing we observe a significant bias towards consumption goods (about 70 euros more out of a total budget value of 1000 euros, i.e. 7%). This behavior under different information sharing scenarios may be interpreted as evidence of self-interest motives to remit rather than pure altruism.

Suggested Citation

  • Giuseppe De Arcangelis & Majlinda Joxhe & Dean Yang, 2016. "Remit for what? The Impact of Information Asymmetries in Transnational Households," Working Papers 3/16, Sapienza University of Rome, DISS.
    • Handle: RePEc:saq:wpaper:3/16
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    More about this item

    Keywords

    In-kind allocation; giving; dictator game; merit goods; virtuous goods; remittance motives; Philippines.;
    All these keywords.

    JEL classification:

    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • D19 - Microeconomics - - Household Behavior - - - Other
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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