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What Motivates Gifts? Intra-Family Transfers in Rural Malawi

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Abstract

This paper uses Family Transfers Project data collected in rural Malawi during 1999 to ascertain the motivation for gift-giving using discriminating hypotheses. The study models monetary and monetized gifts sent and received between the survey respondents and their parents, their children, and their siblings as a function of sender and receiver characteristics. Individual analyses are compared with household level models to reveal that both individual and household characteristics can matter in different cases. OLS, Probit and Tobit models are compared to conclude that, as with other similar studies, a wide range of motivations exist including altruism, (co-)insurance, and an inheritance motive. Motivations differ slightly depending upon the relationship between the sender and receiver, however, no single motive can be attributed to any given relationship.

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Notes

  1. When even pure altruists would not have an incentive to give, but are shown to do so, this is termed the “warm glow” motive to giving (see e.g. Crumpler and Grossman 2008). We would like to thank an anonymous referee for suggesting this as an alternative explanation. Interestingly Cowley et al. (2004) find that some families give gifts to their church which have a negative impact on the family’s financial situation. This suggests either some social pressure or else non-financial compensation such as the “warm glow” motive.

  2. This is particularly important in an agricultural economy such as Malawi. For example, households living in different areas might implicitly agree to send each other transfers whenever one has suffered from drought and the other not. Alternatively, urban and rural income may follow different patterns making it possible to share income through implicit transfer agreements in order that when one household suffers a negative shock, it is supported by the other.

  3. An additional motivation can be found by distinguishing between giving to one’s children and the ultimate aim of “dynastic altruism” or the “survival of the gene” (see e.g. Horioka 2002; Fan 2005).

  4. We would like to thank an anonymous referee for pointing this out.

  5. “Felicity” is used here in order to distinguish between total utility (derived from both one’s own consumption and the consumption of the other) and the utility derived only from one’s own consumption, which has been called ‘felicity’. For example, the Giver’s Utility = f(Utility of Receiver; His/Her own Felicity) where his/her own felicity is derived from his/her own consumption.

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  1. Department of Economics and International Development, University of Bath, Bath, BA2 7AY, UK

    Simon Davies

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Davies, S. What Motivates Gifts? Intra-Family Transfers in Rural Malawi. J Fam Econ Iss 32, 473–492 (2011). https://doi.org/10.1007/s10834-010-9216-1

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