Private monetary transfers and altruism: An empirical investigation on Italian families

The aim of this paper is to explore the motivation of monetary transfers received by Italian household heads. The financial transfers may be motivated by altruism or by the expectation of future services. For this reason, we select a sample of Italian families from the 2006 European Union Statistics on Income and Living Conditions (EU-SILC) dataset. First, we consider the transfer decision and try to account for the factors that affect the probability that the household head will receive a transfer. Next, we restrict our analysis to those families who did receive a positive transfer and examine the factors that affect the size of the transfer. The positive relationship between recipient’s income and transfer amount received is consistent with exchange theory: recipients with higher income ask for higher payments in exchange for services provided. We also explore the relationship between private and public financial transfers. In particular, we choose Italy for its peculiar institutional features. The results imply that the hypothesis about a crowding-out process cannot be rejected. The main contribution of the paper to the existing literature is to investigate the social motivation of private transfers and their implications in terms of policy in a unified framework.