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A Mixed-Motives Model of Private Transfers with Subjectively-Assessed Recipient Need: Evidence from a Poor, Transfer-Dependent Economy
Brown, Richard P. C. and Jimenez, Eliana V. (2008-05). A Mixed-Motives Model of Private Transfers with Subjectively-Assessed Recipient Need: Evidence from a Poor, Transfer-Dependent Economy. Discussion Paper Discussion Paper 365, School of Economics, The University of Queensland.
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| Attached Files (Some files may be inaccessible until you login with your UQ eSpace credentials) |
| Name |
Description |
MIMEType |
Size |
Downloads |
econdp_365_0508.pdf
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DP no. 365 |
application/pdf |
327.64KB |
52 |
| Author(s) |
Brown, Richard P. C.
Jimenez, Eliana V.
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| Title |
A Mixed-Motives Model of Private Transfers with Subjectively-Assessed Recipient Need: Evidence from a Poor, Transfer-Dependent Economy
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| School, Department or Centre |
School of Economics
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| Institution |
The University of Queensland
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| Series |
Discussion Paper
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| Report Number |
Discussion Paper 365
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| Publication date |
2008-05
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| Start page |
pdf-1
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| End page |
pdf-18
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| Total pages |
18
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| Language |
eng
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| Subject |
340210 Welfare Economics
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| Abstract/Summary |
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. JEL classification: D13; D64; F24; H55; I30; O15;
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| Keyword(s) |
Altruism
Crowding-out
Crowding-in
Subjective welfare
Private transfers
Exchange
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