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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, 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," Post-Print halshs-02421346, HAL.
    • Handle: RePEc:hal:journl:halshs-02421346
    DOI: 10.1093/wber/lhz041
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-02421346
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    References listed on IDEAS

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    1. Boltz, Marie & Marazyan, Karine & Villar, Paola, 2019. "Income hiding and informal redistribution: A lab-in-the-field experiment in Senegal," Journal of Development Economics, Elsevier, vol. 137(C), pages 78-92.
    2. Pamela Jakiela & Owen Ozier, 2016. "Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies," Review of Economic Studies, Oxford University Press, vol. 83(1), pages 231-268.
    3. Baland, Jean-Marie & Bonjean, Isabelle & Guirkinger, Catherine & Ziparo, Roberta, 2016. "The economic consequences of mutual help in extended families," Journal of Development Economics, Elsevier, vol. 123(C), pages 38-56.
    4. Grimm, Michael & Hartwig, Renate & Lay, Jann, 2017. "Does forced solidarity hamper investment in small and micro enterprises?," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 827-846.
    5. Carolina Castilla & Thomas Walker, 2013. "Is Ignorance Bliss? The Effect of Asymmetric Information between Spouses on Intra-household Allocations," American Economic Review, American Economic Association, vol. 103(3), pages 263-268, May.
    6. Marie Boltz-Laemmel & Paola Villar, 2013. "Les liens des migrants internes et internationaux à leur ménage d'origine : portraits croisés de familles étendues sénégalaises," PSE-Ecole d'économie de Paris (Postprint) hal-02439586, HAL.
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    8. Gonne Beekman & Marcel Gatto & Eleonora Nillesen, 2015. "Family Networks and Income Hiding: Evidence from Lab-in-the-Field Experiments in Rural Liberia," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 24(3), pages 453-469.
    9. Goldberg, Jessica, 2017. "The effect of social pressure on expenditures in Malawi," Journal of Economic Behavior & Organization, Elsevier, vol. 143(C), pages 173-185.
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