A Mixed-Motives Model of Private Transfers with Subjectively-Assessed Recipient Need: Evidence from a Poor, Transfer-Dependent Economy

Richard P.C. Brown and Eliana V. Jimenez
Additional contact information
Eliana V. Jimenez: School of Economics, The University of Queensland, https://economics.uq.edu.au/

No 365, Discussion Papers Series from University of Queensland, School of Economics

Abstract: 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: 2008
New Economics Papers: this item is included in nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://economics.uq.edu.au/files/44557/365.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:365

Access Statistics for this paper

More papers in Discussion Papers Series from University of Queensland, School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by SOE IT ().