This paper offers a method for testing altruism and applies this to investigate whether parents of young children in rural Pakistan are altruistic. The estimated "altruism coefficient" (defined in the paper) indicates the degree of altruism. Parent altruism is of evident interest in designing welfare programmes. Indeed, we show that parent altruism implies positive effects of parental income on child outcomes. Thus the effectiveness of income transfer programmes targeted at child poverty is conditional on the degree of parent altruism. The prediction of the altruistic model that is tested is that the demand for child goods is increasing in adult consumption, prices constant. M-demands provide the natural estimation framework. The test is conducted for a number of items of adult consumption. For all but tobacco the data decisively reject the null of selfishness. This result is robust to replacing child clothing with child schooling or child labour. We argue that the aberrant behaviour of tobacco may be understood in terms of its addictive properties. We also suggest that the results are consistent with fathers being less altruistic than mothers, tobacco being a predominantly male good.
|Date of creation:||29 Aug 2002|
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