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Income Hiding and Informal Redistribution: A Lab-in-the-Field Experiment in Senegal

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  • Marie Boltz
  • Karine Marazyan
  • Paola Villar

Abstract

This paper estimates the hidden cost of informal redistribution in urban Senegal. It is based on a lab-in-the-field experiment combined with a small-scale randomized controlled trial. We show that two-thirds of the experiment participants are ready to forgo up to 14% of their lab gains to keep them private. When they are given the opportunity to hide, they decrease by 27% the share of gains they transfer to kin and increase health and personal expenses. This is the first paper to identify the individual cost of informal redistribution and to relate it to real-life resource-allocation decisions in a controlled setting.
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  • Marie Boltz & Karine Marazyan & Paola Villar, 2017. "Income Hiding and Informal Redistribution: A Lab-in-the-Field Experiment in Senegal," Working Papers 20170004, Université Paris 1 Panthéon Sorbonne, UMR Développement et Sociétés.
  • Handle: RePEc:uds:wpaper:20170004
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    1. repec:eee:deveco:v:131:y:2018:i:c:p:123-131 is not listed on IDEAS
    2. Alger, Ingela & Weibull, Jörgen W., 2018. "Evolutionary Models of Preference Formation," TSE Working Papers 18-955, Toulouse School of Economics (TSE).
    3. Marie Boltz & Isabelle Chort, 2015. "The Risk of Polygamy and Wives' Saving Behavior," Working Papers DT/2015/12, DIAL (Développement, Institutions et Mondialisation).
    4. repec:eee:jeborg:v:148:y:2018:i:c:p:241-259 is not listed on IDEAS
    5. Di Falco, Salvatore & Feri, Francesco & Pin, Paolo & Vollenweider, Xavier, 2018. "Ties that bind: Network redistributive pressure and economic decisions in village economies," Journal of Development Economics, Elsevier, vol. 131(C), pages 123-131.
    6. Alby, Philippe & Auriol, Emmanuelle & Nguimkeu, Pierre, 2018. "Does Social Pressure Hinder Entrepreneurship in Africa? The Forced Mutual Help Hypothesis," TSE Working Papers 18-956, Toulouse School of Economics (TSE).
    7. Farah Said, 2016. "Access to Finance and Agency: An Overview of the Constraints to Female-Run Enterprises," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 331-349, September.
    8. Nathan Fiala, 2017. "Business is Tough, but Family is Worse: Household Bargaining and Investment in Microenterprises in Uganda," Working papers 2017-05, University of Connecticut, Department of Economics.
    9. Jean-Marie Baland & Roberta Ziparo, 2017. "Intra-household bargaining in poor countries," WIDER Working Paper Series 108, World Institute for Development Economic Research (UNU-WIDER).
    10. Marie Boltz & Isabelle Chort, 2015. "The Risk of Polygamy and Wives' Saving Behavior," Working Papers DT/2015/12, DIAL (Développement, Institutions et Mondialisation).

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