bequest motives revisited: evidence from a randomized choice experiment valerie mueller¹ and ayala...
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Bequest motives revisited:Evidence from a randomized choice
experiment
Valerie Mueller¹ and Ayala Wineman²¹International Food Policy Research Institute, USA
²Department of Agricultural, Food, and Resource Economics, Michigan State University, USA
March 24, 20142014 World Bank Conference on Land and Poverty
Rules of bequest
EGALITARIANEqual division of resources, accounting for both inter-vivos (pre-mortem) and post-mortem transfers
EVOLUTIONARYResources are directed toward individuals that share one’s genes (Cox 2003).
ALTRUISMParents allocate bequests to equalize the marginal value of the transfer for each child (Becker 1974).
EXCHANGEParents exchange bequests for child-provided services, like remittances, care, or insurance (Bernheim et al. 1985).
ALTRUISM
Parent’s problem:
Max U(Coj, y1j, y2j, … , yNj)Lifetime wealth of child 1
s.t. yij = hij + bij
Endowment of child i
Bequest for child i
Coj + = Yj Family wealth F.O.C. solution: yij = f(Yj, )
…This doesn’t vary across children.
Rules of bequest
EXCHANGE
And if a parent needs help: P
Q
Child’s supply
Parent’s new demand
Parent’s problem:Max U(Cj, S) Child-provided
service
Rules of bequest
Summary statisticsMen Women
No. respondents 895 1,673Born in current village 45.1% 19.9%Avg. no. work hours in previous week 37.7 55.3Brought land to own marriage 55.2% 6.0%Brought non-land assets to own marriage 60.0% 17.2%
A randomized choice experiment
“Imagine that you are married and have 4 adult children [Children’s sex and marital status assigned randomly]. Your spouse and all four children are still alive. If (GOD FORBID) you were to die...• What share of LAND would your spouse, each of the children and
anyone else inherit? • What share of MONEY and NON-LAND ASSETS would your spouse,
each of the children and anyone else inherit?”
Patterns of land bequests (experiment)
Men (heads)
(a)
Women (wives)
(b)
Women (heads)
(c)
Testa ≠ b
Testb ≠ c
Equal division of estate among children
0.55 (0.50)
0.61(0.49)
0.76(0.42)
* ***
Boy-girl gap 8.51(14.10)
5.93(13.08)
3.30(10.46)
*** ***
Inequality index 8.52(12.12)
7.35(11.88)
4.16(9.27)
* ***
% for children 66.54(18.60)
66.72(21.48)
75.28(24.46)
***
% for spouse 32.98(18.56)
32.99(21.52)
23.94(24.60)
***
Among those with unequal division of estate among children:
Boy-girl gap 17.74(15.83)
15.08(17.24)
14.01(17.77)
*
Inequality index 18.77(11.46)
18.79(12.08)
17.64(11.25)
Average % of children’s bequest by gender and marital status
Women's responses (land)
Women's responses (assets)
Men's responses (land)
Men's responses (assets)
0 10 20 30 40 50 60 70 80 90 100
Married son Unmarried son Married daughter Unmarried daughter
Percent
Determinants of bequest by gender and marital status (1) (2) (3) (4) % Children's
land bequest% Children's
land bequest
% Children's asset bequest
% Children's asset
bequest Explanatory variables OLS OLS OLS OLS Married boy -0.812 -0.669 -1.061** -1.383** (0.521) (0.883) (0.458) (0.622) Married girl -8.187*** -9.167*** -6.904*** -8.437*** (0.651) (0.779) (0.569) (0.760) Unmarried girl -6.686*** -7.535*** -5.707*** -7.211*** (0.504) (0.751) (0.501) (0.686) Female respondent -0.783 -1.595*** (0.816) (0.516)Female respondent*Married boy -0.304 0.574 (1.128) (0.699)Female respondent*Married girl 1.831* 2.850*** (0.944) (0.774)Female respondent*Unmarried girl 1.619 2.837***
(1.231) (0.784)Constant 28.955*** 29.364*** 28.452*** 29.295***
(0.348) (0.544) (0.323) (0.454) Observations 9,964 9,964 9,876 9,876 R-squared 0.149 0.152 0.112 0.119 P>F(Married girl = Unmarried girl)
0.001 0.005 0.011 0.020
Robust standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1
Determinants of bequest by respondent characteristics (1)
(1) (2) %
Children's land
bequest
% Children's asset
bequest
Explanatory variables OLS OLS Married boy -0.816 -1.081 (0.527) (0.464)Married girl -8.270*** -6.973*** (0.664) (0.583)Unmarried girl -6.736*** -5.760*** (0.513) (0.512)Respondent is too old/sick to work
-1.315 -1.406
(1.021) (0.864)Old/Sick*Married boy 0.021 0.748 (0.994) (0.906)Old/Sick*Married girl 3.666** 2.987** (1.618) (1.428)Old/Sick*Unmarried girl 2.153 2.291
(1.554) (1.442)Constant 28.987*** 29.487***
(0.353) (0.329) Observations 9,964 9,876 R-squared 0.150 0.113 P>F(Married girl = Unmarried girl)
0.001 0.012
Robust standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1
Determinants of bequest by respondent characteristics (2)
(1) (2) %
Children's land
bequest
% Children's asset
bequest
Explanatory variables OLS OLS Married boy -0.044 -0.675 (1.151) (1.004)Married girl -9.734*** -9.881*** (1.009) (1.117)Unmarried girl -8.362*** -8.483*** (1.040) (1.001)Work hours in past week -0.013 -0.029*** (0.013) (0.010)Work hours*Married boy -0.016 -0.008 (0.021) (0.017)Work hours*Married girl 0.033* 0.064*** (0.017) (0.017)Work hours*Unmarried girl 0.036* 0.060***
(0.020) (0.015)Constant 29.559*** 29.764***
(0.671) (0.657) Observations 9,964 9,876 R-squared 0.153 0.122 P>F(Married girl = Unmarried girl)
0.126 0.095
Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1
Final Thoughts• Multiple motives are involved in bequests.• These differ according to the parent’s gender and
needs.• We find support for the egalitarian model (for boys
only); strategic bequest; evolutionary motives; and maybe altruism, too.
• We will exploit exogenous variation in access to an equity awareness service. Does this shift exchange motives to more egalitarian practices?
• We hope to collect additional information on heirs at endline.
Thank you!