Is Informal Redistribution Costly? Evidence from a Lab-in-the-Field Experiment in Senegal

Marie Boltz, Karine Marazyan and Paola Villar

The World Bank Economic Review, 2020, vol. 34, issue Supplement_1, S72-S78

Abstract: In Sub-Saharan Africa, individuals frequently transfer a substantial share of their resources to members of their social networks. Social pressure to redistribute, however, can induce disincentive effects on resource allocation decisions. This paper measures and characterizes the costs of redistributive pressure by estimating individuals’ willingness to pay (WTP) to hide their income. The study estimates a social tax due to informal redistribution of 10 percent. Moreover, it shows that individuals are willing to escape from the redistributive pressure exerted mainly by extended family members.

Keywords: income observability; informal redistribution; extended families; willingness to pay; Lab-in-the-field experiment; Africa (search for similar items in EconPapers)
Date: 2020
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Working Paper: Is Informal Redistribution Costly? Evidence from a Lab-in-the-Field Experiment in Senegal (2019)
Working Paper: Is Informal Redistribution Costly? Evidence from a Lab-in-the-Field Experiment in Senegal (2019)
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