A Study For Motivation For Private Transfers In Cote D'Ivoire

Donald Cox (donald.cox@bc.edu) and Emmanuel Jimenez
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Emmanuel Jimenez: The World Bank

No 234, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: We test for the motivation for private inter-household transfers of income by modeling transfer behavior under two alternative hypotheses: altruistic and exchange-motivated transfers. Knowing the underlying motivation for private income transfers is important because such motivation determines household responses to public income redistribution programs. We find that transfer patterns are more consistent with altruism than exchange. Our tests are based on the relationship between recipient pre-private-transfer income and transfer amounts. The strong form of the altruism hypothesis implies that these two variables are always inversely related. The exchange model predicts a more complex relationship between them. We also find that private transfers are likely to be influenced by imperfections in capital markets. The empirical results indicate that, counter to the predictions of the strong form of altruism model; public income redistribution is likely to have an impact on the distribution of economic well being among households.

Date: 1993-12
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