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On altruism and remittances

Author

Listed:
  • Alexis Antoniades
  • Ganesh Seshan
  • Roberto A. Weber
  • Robertas Zubrickas

Abstract

We provide a direct test of the impact of altruism on remittances. From a sample of 105 male migrant workers from Kerala, India working in Qatar, we elicit the propensity to share with others from their responses in a dictator game, and use it as a proxy for altruism. When the entire sample is considered, we find that only migrants' income robustly explains remittances. Altruism does not seem to matter. However, we document a strong positive relationship between altruism and remittances for those migrants that report a loan obligation back home, which is nearly half the sample. We explain the role of loan obligations with a standard remittance model, extended with reference-dependent preferences.

Suggested Citation

  • Alexis Antoniades & Ganesh Seshan & Roberto A. Weber & Robertas Zubrickas, 2013. "On altruism and remittances," ECON - Working Papers 131, Department of Economics - University of Zurich.
  • Handle: RePEc:zur:econwp:131
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    References listed on IDEAS

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    1. Johannes Abeler & Armin Falk & Lorenz Goette & David Huffman, 2011. "Reference Points and Effort Provision," American Economic Review, American Economic Association, vol. 101(2), pages 470-492, April.
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    3. Botond Kőszegi & Matthew Rabin, 2006. "A Model of Reference-Dependent Preferences," The Quarterly Journal of Economics, Oxford University Press, vol. 121(4), pages 1133-1165.
    4. Mandelman, Federico S. & Zlate, Andrei, 2012. "Immigration, remittances and business cycles," Journal of Monetary Economics, Elsevier, vol. 59(2), pages 196-213.
    5. Tigran A. Melkonyan & David A. Grigorian, 2011. "Microeconomic Implications of Remittances in an Overlapping Generations Model with Altruism and a Motive to Receive Inheritance," Journal of Development Studies, Taylor & Francis Journals, vol. 48(8), pages 1026-1044, March.
    6. Rapoport, Hillel & Docquier, Frederic, 2006. "The Economics of Migrants' Remittances," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
    7. Bettin, Giulia & Lucchetti, Riccardo & Zazzaro, Alberto, 2012. "Financial development and remittances: Micro-econometric evidence," Economics Letters, Elsevier, vol. 115(2), pages 184-186.
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    11. Jørgen Carling, 2008. "The determinants of migrant remittances," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 582-599, Autumn.
    12. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    13. Poirine, Bernard, 1997. "A theory of remittances as an implicit family loan arrangement," World Development, Elsevier, vol. 25(4), pages 589-611, January.
    14. Funkhouser, Edward, 1995. "Remittances from International Migration: A Comparison of El Salvador and Nicaragua," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 137-146, February.
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    More about this item

    Keywords

    Remittances; altruism; reference-dependent preferences; dictator game; Qatar;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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