A Mixed-Motives Model of Private Transfers with Subjectively-Assessed Recipient Need: Evidence from a Poor, Transfer-Dependent Economy
We extend the mixed-motives model of transfer derivatives developed by Cox et al (2004) introducing subjectively-assessed recipient need in place of an absolute income threshold at which the donor’s dominant motive switches from altruism to exchange. This refinement provides a theoretically justifiable threshold amenable to empirical measurement. We test the extended model with customized survey data from Tonga and find evidence consistent with Cox et al in support of altruism for households below the threshold, but, we also find a positive, exchange-motivated relationship for those above the threshold. We conclude that either crowding-out or crowding-in of private transfers can occur when the recipient’s welfare improves, depending on the household’s pre-transfer welfare level. This also has implications for the distributional impact of private transfers and could explain why poverty reduction can be accompanied by increased income inequality.
|Date of creation:||2008|
|Contact details of provider:|| Postal: St. Lucia, Qld. 4072|
Phone: +61 7 3365 6570
Fax: +61 7 3365 7299
Web page: http://www.uq.edu.au/economics/
More information through EDIRC
References listed on IDEAS
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.:
- Fafchamps, Marcel & Shilpi, Forhad, 2008.
"Subjective welfare, isolation, and relative consumption,"
Journal of Development Economics,
Elsevier, vol. 86(1), pages 43-60, April.
- Fafchamps, Marcel & Shilpi, Forhad, 2006. "Subjective Welfare, Isolation and Relative Consumption," CEPR Discussion Papers 6002, C.E.P.R. Discussion Papers.
- Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
- David G. Blanchflower & Andrew J. Oswald, 2000. "Well-Being Over Time in Britain and the USA," NBER Working Papers 7487, National Bureau of Economic Research, Inc.
- Blanchflower, David G. & Oswald, Andrew J., 2001. "Well-Being Over Time in Britain and the USA," The Warwick Economics Research Paper Series (TWERPS) 616, University of Warwick, Department of Economics.
- Cox, Donald & Hansen, Bruce E. & Jimenez, Emmanuel, 2004. "How responsive are private transfers to income? Evidence from a laissez-faire economy," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2193-2219, August.
- Donald Cox & Bruce E. Hansen & Emmanuel Jimenez, 1997. "How Responsive are Private Transfers to Income? Evidence from a Laissez-Faire Economy," Boston College Working Papers in Economics 341., Boston College Department of Economics, revised 01 Dec 1999.
- Kaufmann, Daniel & Lindauer, David L., 1986. "A model of income transfers for the urban poor," Journal of Development Economics, Elsevier, vol. 22(2), pages 337-350.
- Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1992. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," American Economic Review, American Economic Association, vol. 82(5), pages 1177-1198, December.
- Joseph G. Altonji & Fumio Hayashi & Laurence J. Kotlikoff, 1989. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," NBER Working Papers 3046, National Bureau of Economic Research, Inc.
- Cox, Donald & Fafchamps, Marcel, 2008. "Extended Family and Kinship Networks: Economic Insights and Evolutionary Directions," Handbook of Development Economics, Elsevier.
- John Gibson & Susan Olivia & Scott Rozelle, 2006. "How Widespread are Non-linear Crowding Out Out Effects? The Response of Private Transfers to Income in Four Developing Countries," Working Papers in Economics 06/01, University of Waikato.
- John Gibson & David McKenzie & Halahingano Rohorua, 2006. "How Cost Elastic are Remittances? Estimates from Tongan Migrants in New Zealand," Working Papers in Economics 06/02, University of Waikato.
- Kazianga, H., 2006. "Motives for household private transfers in Burkina Faso," Journal of Development Economics, Elsevier, vol. 79(1), pages 73-117, February.
- Harounan Kaziango, 2004. "Motives for Household Private Transfers in Burkina Faso," Working Papers 895, Economic Growth Center, Yale University.
- 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.
- 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.
- Krishna, Anirudh, 2004. "Escaping Poverty and Becoming Poor: Who Gains, Who Loses, and Why?," World Development, Elsevier, vol. 32(1), pages 121-136, January.
- Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-546, June.
- Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:qld:uq2004:365. 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: (SOE IT)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.