Motives For Household Private Transfers In Rural Burkina Faso
This paper explores the motives for inter-household private transfers in rural Burkina Faso. Given the importance of private transfers in household income, quantitatively evaluating the response of private transfers to recipient incomes is informative for the design and the implementation of public interventions, such as policy alleviation programs, which often include transfer programs. To the extent that private transfers interact with public ones, the overall impact of public transfers might be offset, leaving income distribution unchanged. I use the transfers model proposed by Cox, and two national surveys from Burkina to test whether private transfers are motivated by altruism, exchanges or by risk sharing objectives. The econometric estimations control for income endogeneity via instrumental variables, and use three alternative specifications: a spline regression, which is standard in the literature, a friction model which controls for the large fraction of non-participants, and a partial linear model which relaxes the functional form assumption between transfers and income. The findings support the equalizing effects of private transfers. Furthermore, transfers received are reduced by pre-transfers incomes and the effect is larger for low income households. These results support altruistic motives for transfers. In the highest quartile, exchanges motives seem to prevail as indicated by the semi-parametric explorations. Transfers are also used to cope with income risk, although the response to transitory income shocks is relatively small. Overall, the findings provide evidence on the interactions between private and public transfers, which may limit the net effects of public interventions which use transfers to pursue income equality objectives.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Donald Cox & Zekeriya Eser & Emmanuel Jimenez, 1996.
"Motives for Private Transfers over the Life Cycle: An Analytical Framework and Evidence for Peru,"
Boston College Working Papers in Economics
327., Boston College Department of Economics.
- Cox, Donald & Eser, Zekeriya & Jimenez, Emmanuel, 1998. "Motives for private transfers over the life cycle: An analytical framework and evidence for Peru," Journal of Development Economics, Elsevier, vol. 55(1), pages 57-80, February.
- Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-46, June.
- Becker, Gary S, 1974.
"A Theory of Social Interactions,"
Journal of Political Economy,
University of Chicago Press, vol. 82(6), pages 1063-93, Nov.-Dec..
- Robert M. Townsend, .
"Risk and Insurance in Village India,"
University of Chicago - Population Research Center
91-3a, Chicago - Population Research Center.
- Joseph G. Altonji & Fumio Hayashi & Laurence J. Kotlikoff, 1995.
"Parental Altruism and Inter Vivos Transfers: Theory and Evidence,"
Boston University - Institute for Economic Development
65, Boston University, Institute for Economic Development.
- Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1997. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1121-66, December.
- Joseph G. Altonji & Fumio Hayashi & Laurence Kotlikoff, 1995. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," NBER Working Papers 5378, National Bureau of Economic Research, Inc.
- Joseph G. Altonji & Fumio Hayashi & Laurence Kotlikoff, . "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," IPR working papers 95-22, Institute for Policy Resarch at Northwestern University.
- Christopher R. Udry & Esther Duflo, 2004.
"Intrahousehold Resource Allocation in Cote D'Ivoire: Social Norms, Separate Accounts and Consumption Choices,"
Yale School of Management Working Papers
ysm407, Yale School of Management.
- Esther Duflo & Christopher Udry, 2004. "Intrahousehold Resource Allocation in Cote d'Ivoire: Social Norms, Separate Accounts and Consumption Choices," NBER Working Papers 10498, National Bureau of Economic Research, Inc.
- Esther Duflo & Christopher Udry, 2003. "Intrahousehold Resource Allocation in Côte D'ivoire: Social Norms, Separate Accounts and Consumption Choices," Working Papers 857, Economic Growth Center, Yale University.
- Mace, Barbara J, 1991. "Full Insurance in the Presence of Aggregate Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 928-56, October.
- Udry, Christopher, 1990. "Credit Markets in Northern Nigeria: Credit as Insurance in a Rural Economy," World Bank Economic Review, World Bank Group, vol. 4(3), pages 251-69, September.
- Stark, Oded & Falk, Ita, 1998.
"Transfers, Empathy Formation, and Reverse Transfers,"
American Economic Review,
American Economic Association, vol. 88(2), pages 271-76, May.
- Oded Stark & Ita Falk, 1998. "Transfers, Empathy Formation, and Reverse Transfers," Departmental Working Papers _091, Chinese University of Hong Kong, Department of Economics.
- Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-18, October.
- Cochrane, John H, 1991. "A Simple Test of Consumption Insurance," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 957-76, October.
- Morduch, Jonathan, 1999. "Between the State and the Market: Can Informal Insurance Patch the Safety Net?," World Bank Research Observer, World Bank Group, vol. 14(2), pages 187-207, August.
- Robinson, Peter M, 1988. "Root- N-Consistent Semiparametric Regression," Econometrica, Econometric Society, vol. 56(4), pages 931-54, July.
- Paxson, Christina H, 1992. "Using Weather Variability to Estimate the Response of Savings to Transitory Income in Thailand," American Economic Review, American Economic Association, vol. 82(1), pages 15-33, March.
- Cox, Donald & Jakubson, George, 1995. "The connection between public transfers and private interfamily transfers," Journal of Public Economics, Elsevier, vol. 57(1), pages 129-167, May.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea03:21949. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.