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Is Informal Redistribution Costly? Evidence from a Lab-in-the-Field Experiment in Senegal

Author

Listed:
  • Marie Boltz

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Karine Marazyan

    (IEDES - Instutut d'Études du Développement de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne, DEVSOC - UMR Développement et Sociétés - UP1 - Université Paris 1 Panthéon-Sorbonne - IRD - Institut de Recherche pour le Développement)

  • Paola Villar

    (INED - Institut national d'études démographiques, UNamur - Université de Namur [Namur])

Abstract

In Sub-Saharan Africa, individuals frequently transfer a substantial share of their resources to members of their social networks. Social pressure to redistribute, however, can induce disincentive effects on resource allocation decisions. This paper measures and characterizes the costs of redistributive pressure by estimating individuals' willingness to pay (WTP) to hide their income. The study estimates a social tax due to informal redistribution of 10 percent. Moreover, it shows that individuals are willing to escape from the redistributive pressure exerted mainly by extended family members.

Suggested Citation

  • Marie Boltz & Karine Marazyan & Paola Villar, 2019. "Is Informal Redistribution Costly? Evidence from a Lab-in-the-Field Experiment in Senegal," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-02421346, HAL.
    • Handle: RePEc:hal:cesptp:halshs-02421346
    DOI: 10.1093/wber/lhz041
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