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Inter-Household Private Transfers and Underlying Motives: Evidence for Bulgaria

Author

Listed:
  • António Gomes de Menezes

    (University of the Azores)

  • Dario Sciulli

    (University of the Azores)

Abstract

The effects of interactions between private transfer behaviour and income redistribution policies depend on the motives underlying private income transfers. This paper tests for two different potential motives: pure altruism versus simple exchange, in the presence of capital market imperfections. Using household survey data for Bulgaria, microeconometric evidence is found that both motives are in effect. We also find evidence that capital market imperfections are likely to be binding for consumption smoothing, and hence are an important cause of private transfers. The results indicate that social security benefits "crowd out" the amount of private transfers received but not the incidence of private transfers. Finally, private transfers play an important role as a safety net as they significantly decrease poverty rates and the inequality of income distribution.

Suggested Citation

  • António Gomes de Menezes & Dario Sciulli, 2007. "Inter-Household Private Transfers and Underlying Motives: Evidence for Bulgaria," Notas Económicas, Faculty of Economics, University of Coimbra, issue 25, pages 59-74, June.
  • Handle: RePEc:gmf:journl:y:2007:i:25:p:59-74
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    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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