As an Economy Becomes More Developed, Do People Become Less Altruistic?

Abstract

Inter-household private transfers are one of the main informal insurance mechanisms that prevalently implemented in developing countries. Unfortunately, most of the literatures investigates the private transfer motives at static perspectives. Therefore, this paper took advantage to investigate the private transfers motives in Thailand over the past three decades in order to examine any changing patterns of transfer motives. The empirical results from econometric methods indicated that as the economy in Thailand continues to develop, altruism remains dominant for private inter-household motives in Thailand and persists over time, not only in rural but also urban areas of the country.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. There are other disciplines that have studied motives for private transfers, including social psychology, sociology, and anthropology (Tomini, 2010). However, this paper only focuses on an explanation from an economic viewpoint.

2. The empirical results on this topic remain mixed. Some studies have found a strong crowding out effect (for example, Cox & Jimenez, 1992; Jensen, 2004; Kang & Lee, 2003), while others (for example, Cox & Jakubson, 1995; Rosenzweig & Wolpin, 1994) have found that the crowding out effect is minimal.

3. Cox (1987) indicated that the altruistic motive tended to occur when the recipient’s income was low, whereas the exchange motive dominated at higher income levels.

4. Bernheim et al. (1985) called this motive ‘the strategic bequest motive’ because it involves bequests that parents leave to their offspring.

Additional information

Funding

This work was supported by the Assumption University of Thailand [The research project number P580590].