published in: Review of Economics of the Household, 2006, 4, 183 - 204
The paper aims to ascertain whether voluntary money transfers may be explained by the
existence of self-enforcing family constitutions. We identify a circumstance in which an agent
will behave differently if she is optimizing subject to a family constitution, than if she is moved
by either altruistic or exchange motivations. The circumstance is the presence of a binding
credit ration, which may raise the probability of making a money transfer (and the amount of
money transferred) if a family constitution exists, but will have the opposite effect if the
transfer is either a gift, or payments for services rendered. Allowing for possible endogeneity,
we find that rationing has a positive effect on the probability of giving money, and on the
amount given, if the potential giver is under the age of retirement and has children, but no
significant effect if the person has no children, or is over the retirement age. This rejects the
hypothesis that money transfers are motivated by either altruistic or straight exchange
motives, but not the one that these transfers are governed by family constitutions.
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