Is there such a thing as a family constitution? A test based on credit rationing

Alessandro Cigno, Gianna Claudia Giannelli (), Furio Rosati and Daniela Vuri ()

Review of Economics of the Household, 2006, vol. 4, issue 3, 183-204

Abstract: The paper tests the hypothesis that private transfers can be explained by the existence of self-enforcing family constitutions prescribing the minimum level at which a person in middle life should support her young children and elderly parents. The test is based on the effect of a binding credit ration on the probability of making a money transfer, which can be positive only in the presence of family constitutions. Allowing for the possible endogeneity of the credit ration, we find that rationing has a positive effect on the probability of giving money if the potential giver is under the age of retirement, but no significant effect if the person is already retired. This appears to reject the hypothesis that transfer behavior is the outcome of unfettered individual optimization on the part of either altruistic or exchange motivated agents, but not the one that individuals optimize subject to a self-enforcing family constitution. The policy implications are briefly discussed. Copyright Springer Science+Business Media, LLC 2006

Keywords: Family constitution; Altruism; Exchange; Credit ration; Private transfers; Personal services; D13; J13; J14 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (25)

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Working Paper: Is There Such a Thing as a Family Constitution? A Test Based on Credit Rationing (2004)
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DOI: 10.1007/s11150-006-0010-7

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