Handbook of the Economics of Giving, Altruism and Reciprocity, Volume 2: Applications

724 Pages·2006·4.91 MB·English

by  Serge-Christophe Kolm

INTRODUCTIONTOTHESERIES
The aim of the Handbooks in Economics series is to produce Handbooks for various
branches of economics, each of which is a definitive source, reference, and teaching
supplement for use by professional researchers and advanced graduate students. Each
Handbookprovidesself-containedsurveysofthecurrentstateofabranchofeconomics
intheformofchapterspreparedbyleadingspecialistsonvariousaspectsofthisbranch
ofeconomics.Thesesurveyssummarizenotonlyreceivedresultsbutalsonewerdevel-
opments,fromrecentjournalarticlesanddiscussionpapers.Someoriginalmaterialis
also included, but the main goal is to provide comprehensive and accessible surveys.
TheHandbooksare intendedto providenotonlyuseful referencevolumesfor profes-
sional collections but also possible supplementary readings for advanced courses for
graduatestudentsineconomics.
KENNETHJ.ARROWandMICHAELD.INTRILIGATOR
v
CONTENTSOFTHEHANDBOOK
VOLUME1
Chapter1
IntroductiontotheEconomicsofGiving,AltruismandReciprocity
SERGE-CHRISTOPHEKOLM
PARTI:FOUNDATIONS
1A:Socialview
Chapter2
TheEmpiricalAnalysisofTransferMotives
ERIKSCHOKKAERT
Chapter3
AltruisticBehaviorandAltruisticMotivations
JONELSTER
Chapter4
TheGiftandReciprocity:PerspectivesfromEconomicAnthropology
CHRISHANN
1B:Overallviews
Chapter5
TheEconomicTheoryofGift-Giving:PerfectSubstitutabilityofTransfersand
RedistributionofWealth
JEANMERCIERYTHIER
Chapter6
Reciprocity:ItsScope,Rationales,andConsequences
SERGE-CHRISTOPHEKOLM
1C:Experimentalsocialpsychology
Chapter7
TheFormationofSocialPreferences:SomeLessonsfromPsychologyandBiology
LOUISLÉVY-GARBOUA,CLAUDEMEIDINGERANDBENOÎTRAPOPORT
vii
viii ContentsoftheHandbook
Chapter8
TheEconomicsofFairness,ReciprocityandAltruism–ExperimentalEvidence
andNewTheories
ERNSTFEHRANDKLAUSM.SCHMIDT
1D:Humannature
Chapter9
TheEconomicsofHumanRelationships
PIERLUIGISACCO,PAOLOVANINANDSTEFANOZAMAGNI
Chapter10
HumanNatureandSocialityinEconomics
NICHOLASBARDSLEYANDROBERTSUGDEN
1E:Specialtopics
Chapter11
NaturalKantianorZooEconomicus?EvolutionaryTheoriesofSelfishnessand
AltruismamongMenandBeasts
THEODOREC.BERGSTROM
Chapter12
SolidarityNormsandInstitutionsinVillageSocieties:StaticandDynamic
Considerations
JEAN-PHILIPPEPLATTEAU
VOLUME2
PARTII:FAMILYTRANSFERS
Chapter13
MicroeconomicModelsofFamilyTransfers
ANNELAFERRÈREANDFRANÇOIS-CHARLESWOLFF
Chapter14
Altruism,ExchangeorIndirectReciprocity:WhatDotheDataonFamily
TransfersShow?
LUCARRONDELANDANDRÉMASSON
Chapter15
IntergenerationalAltruismandNeoclassicalGrowthModels
PHILIPPEMICHEL,EMMANUELTHIBAULTANDJEAN-PIERREVIDAL
ContentsoftheHandbook ix
Chapter16
WealthTransferTaxation:ASurveyoftheTheoreticalLiterature
HELMUTHCREMERANDPIERREPESTIEAU
Chapter17
TheEconomicsofMigrants’Remittances
HILLELRAPOPORTANDFRÉDÉRICDOCQUIER
PARTIII:THIRDSECTORANDLABOR
Chapter18
Philanthropy
JAMESANDREONI
Chapter19
DonativeNonprofitOrganizations
MARCBILODEAUANDRICHARDSTEINBERG
Chapter20
TheEconomicsofOrganTransplantation
EMANUELD.THORNE
Chapter21
Altruism,ReciprocityandCooperationintheWorkplace
JULIOJ.ROTEMBERG
Chapter22
Reciprocity,Altruism,andCooperativeProduction
LOUISPUTTERMAN
PARTIV:THEPOLITICALECONOMYOFVOLUNTARYTRANSFERS
Chapter23
StrongReciprocityandtheWelfareState
CHRISTINAM.FONG,SAMUELBOWLESANDHERBERTGINTIS
Chapter24
Selfishness,AltruismandNormativePrinciplesintheEconomicAnalysisof
SocialTransfers
DIDIERBLANCHETANDMARCFLEURBAEY
Chapter25
ThePoliticalEconomyofIntergenerationalCooperation
ALESSANDROCIGNO
x ContentsoftheHandbook
Chapter26
TheEconomicsofInternationalAid
RAVIKANBUR
PREFACETOTHEHANDBOOK
Fieldandmethods
The field of the Handbook is the analysis of non-market voluntary transfers of scarce
resources,ofthereasonsfortheirexistenceincludingnotablythemotivesoftheagents
involved, and of their relations and interactions with market allocation and public fi-
nance.Itincludesthemeasurementofthemagnitudeandshareofnon-marketvoluntary
transfersandtheirevolutionovertime;andtheassessmentoftheimportanceofmoral
conductsin market exchangefor thegoodfunctioningof markets. It also includesthe
developing,and systematic use for the purposes of economicanalysis, of descriptions
and abstract representations of the “social man” significantly more realistic, accurate
and complete than the conventional representation of the “economic man” often as-
sumed in the economics of the nineteenth and twentieth centuries. From this latter
aspect,theHandbookextendsandrenewsacontinuoustraditionofeconomicscience,
notablyrepresentedintheworksofmostofthefounders,fromthelateeighteenthcen-
tury(AdamSmith)totheearlytwentieth(notablyPareto).Applicationsincludefamily
transfers, gift-giving and volunteering in charities and other non-profit organizations,
cooperation and reciprocity in labor relations, social transfers, public redistribution
and international aid. Methods cover a wide spectrum, in relation to the variety of
considered phenomena, notably: psychological and normative analysis, including the
relevant branches of moral and political philosophy; models of economic equilibrium
andgrowth;gametheory,includingitsevolutionaryvariants;laboratoryexperimentsin
psychologyandgameinteractions;andeconometricandstatisticalassessmentoftrans-
fersandtransfermotives.
Purpose
TheHandbookoftheEconomicsofGiving,AltruismandReciprocityaimstoprovidea
definitivesource,referenceguide,andteachingsupplementforitsfield.Itsurveys,asof
theearly2000’s,thestateoftheartoftheeconomictheoryandoftheeconometricand
statisticalstudyofitsobject,anditalsoprovidesextensivereviewsofthecontemporary
contributions of the other disciplines concerned by the domain, such as anthropology,
psychology,philosophy,politicalscience,sociology,biologyandsocio-biology.Inad-
dition to its use as a reference guide, the Editors hope that this Handbook will assist
researchers and students working in a particular branch of this vast field to become
acquaintedwithotherbranches.Eachofthechapterscanbereadindependently.
xi
xii PrefacetotheHandbook
Organization
The Handbook includes 26 chapters on various topics in the field. Chapter 1 intro-
ducesthesubjectandproposesafirstoverviewofthefield.Thefollowingchaptersare
arrangedintofourparts.PartItreatsFoundations,includingreviewsofeconomictheo-
riesandempiricalfindingsrelativetogift-giving,reciprocityandtheirmotives,andalso
surveysofsimilarcontributionsfromwithinanthropology,philosophy,psychologyand
evolutionarytheory.Thenextthreepartsconcentrateonapplicationstothethreesectors
ofsocietywherenon-marketvoluntarytransfersareparticularlysignificant:thefamily,
withPartIIrelativetoFamilyTransfers,includingmicroeconomicandmacroeconomic
theoriesoffamilytransfersandoftheirtaxation,andcorrespondingeconometricanaly-
ses; the third sector, with Part III on Third Sector and Labour, including theoretical
andempiricalanalyses of philanthropy,non-profitorganizations, cooperativesand co-
operationinlaborrelations,andorgandonations;andtheState,withPartIV covering
ThePoliticalEconomyofVoluntaryTransfers,includingreviewsofthetheoreticaland
empiricalanalysesofthewelfarestateandofinternationalaid.
Level
Allthetopicspresentedaretreatedatanadvancedlevel,suitableforusebyeconomists
andsocialscientistsworkinginthefield,orbygraduatestudentsinbotheconomicsand
thesocialsciences.
Acknowledgements
Firstofall,wewouldliketomakeaspecialmentionofgratitudetoLouis-AndréGérard-
Varet, who participated as editor to the initial conception of the Handbook, and who
unfortunatelydiedshortlyafterthelaunchingoftheproject.Thesetwovolumeswould
nothaveexistedwithouthim.Theyarededicatedtohismemory.Ourotherprincipalac-
knowledgementsaretoKennethArrowandMichaelIntriligatorfortheirfriendlyadvice
asgeneraleditorsoftheseries,andtotheauthorsofchaptersinthepresentHandbook,
whonotonlypreparedtheirownchaptersbutalsoprovidedadviceontheorganization
and content of the volumes and reviewed other chapters. We are also most grateful to
ValerieTeng,seniorpublishingeditorincharge,andherteam,fortheirveryhelpfulas-
sistanceandtheirpatience.Theauthors’conferencethatweorganizedatMarseillesin
January2002wasanimportantstepinthepreparationofthevolumes.Weareindebted
to the Institut d’Economie Publique, the Université de la Méditerranée, and the Ecole
des Hautes Etudes en Sciences Sociales for providing us with the necessary financial
andorganizationalsupportonthisoccasion.Finally,wearegratefultotheUniversitéde
Metz and the Equipe de Recherche en Anthropologie et Sociologie de l’Expertise for
providinguswithfinancialsupportfortheeditingofsubstantialpartsofthevolumes.
Theeditors
Chapter13
MICROECONOMICMODELSOFFAMILYTRANSFERS*
ANNELAFERRÈRE
INSEE(InstitutNationaldelaStatistiqueetdesEtudesEconomiques)andCREST(CentredeRechercheen
EconomieetStatistiques),Paris,France
e-mail:[email protected]
FRANÇOIS-CHARLESWOLFF
LEN-CEBSUniversityofNantes,CNAVandINED,Paris,France
e-mail:[email protected]
Contents
Abstract 890
Keywords 891
1. Whatfamiliesaremadeof 892
2. Altruism,orthepoweroffamilies 893
2.1. Theeightpillarsofpureone-sidedaltruism,andredistributiveneutrality 894
2.2. Two-sidedaltruism 898
2.3. Multiplerecipientsormultipledonors 901
2.3.1. Wherealtruisticfairnessleadstoinequality,andtheRottenBrothertheorem 901
2.3.2. Free-ridingontheother’saltruism 904
2.4. Extendingthemodeltoendogenousincomes 907
2.4.1. Wherethechildmaybecomerotten 908
2.4.2. TheSamaritandilemmaandfutureuncertainty 911
2.4.3. Parentscan’tberotten,buttwogoodscomplicatethepicture 912
2.5. Daddyknowsbest 914
3. Impurealtruism:meritgoodandtransfersasameansofexchange 915
3.1. Child’seffortasameritgood 916
3.2. Buyingorextortingthechild’sservicesortheparent’sinheritance 917
3.2.1. Fromtransfertotransaction 918
3.2.2. Thecaseofadominantchild 921
3.2.3. Astrategytobuythechildren’sservices 923
* ThanksareduetoourrefereeJean-PierreVidal,totheeditors,andtoFrancisKramarz,MohamedJellal,
GuyLaroque,DavidleBlanc,BernardSalaniéfordiscussionsandreadingallorpartofpreviousversions.
Remainingerrorsareours.
HandbookoftheEconomicsofGiving,AltruismandReciprocity,Volume2
EditedbySerge-ChristopheKolmandJeanMercierYthier
Copyright©2006ElsevierB.V. Allrightsreserved
DOI:10.1016/S1574-0714(06)02013-6
890 A.LaferrèreandF.Wolff
3.3. Transfersasfamilyloans 925
3.4. Familyinsuranceandbanking 928
3.5. Decisionswithinthefamily:altruismandcollectivemodels 929
3.6. Pureandimpurealtruism 932
4. Non-altruism:transfersasold-agesecurity 933
4.1. Themutualitymodelorhowtogluethegenerationstogether 934
4.2. Oldagesupport:othermechanisms 938
5. Theformationofpreferences 939
5.1. Toimitateortodemonstrate? 939
5.2. Culturaltransmissionandendogenouspreferences 942
5.2.1. Culturaltransmission 944
5.2.2. Endogenousaltruism,pricesandinterest 945
6. Testsoffamilytransfermodels 948
6.1. Whogiveswhat,andtowhom? 948
6.2. Institutionsandfamilytransfers 951
6.3. Thelimitedscopeofpurealtruism 952
6.4. Testsoffamilymutualitymodels 956
7. Conclusion:homoreciprocans,orlivinginaworldofexternalities 958
References 961
Abstract
Standardhomoeconomicuslivesinaworldofcompletemarketsandmaximizesutility
which is a function of his personal consumption. This approximation cannot account
for parents making transfers to adult children, children taking care of old parents, nor
forgifts,inheritanceandmanyotherservicesexchangedwithinfamilies.Suchbehav-
iorcanbederivedfromthreemainmechanisms.Firstly,intheso-calledpurealtruism
model,theparent’sutilityisaugmentedbytheutilityofhischild.Thisleadstotransfers
fromtheparenttohischild.Animportantfeatureofthismodelisthestrongproperty
ofredistributiveneutrality:sinceparentsandchildpooltheirincome,anygovernment
transfertoonewillbeundonebytheotheradjustinghistransfer.Inasecondmodel,al-
truismisimpureastheparentswantthechildtobehaveinacertainway:exchangeand
strategic considerations enter the picture, as both parents’ and child’s income become
endogenous.Thirdly,inanon-altruisticsetting,withimperfectcreditmarket,transfers
tochildrenandtooldparentscorrespondtoareciprocitycontractandareaninvestment
foroldage.Familiesembodylongtermandwidespreadcommitments:bornasaneedy
child, one becomes a parent and ultimately a (perhaps) needy grandparent. Moreover
formuchofwhatisexchangedwithinfamilies,thereisnomarketsubstitute.Thesefea-
turesexplainwhythenetworkofreciprocitiescanbelargebothintimeandspace,why
thosetransferschangebutdonotdisappearasmarketorpublicinsurancedevelop,and
whydisplacingthemcanhaveperversesideeffects.
Ch.13: Microeconomicmodelsoffamilytransfers 891
Familytransfers influenceintra- and inter-generationalinequality,hence the impor-
tance to assess their motivation. Tests usually conclude that the income pooling pre-
dicted by pure altruism is not observed, but family transfers are also far from being
entirelymotivatedbydirectexchangeconsiderations.
Keywords
altruism,exchange,reciprocity,intergenerationaltransfer,redistribution
JELclassification:D1,D64,J14,J22,R2