Original Paper

Journal of Population Economics

, Volume 22, Issue 4, pp 1063-1080

First online:

Happiness functions with preference interdependence and heterogeneity: the case of altruism within the family

  • Adrian BruhinAffiliated withUniversity of Zurich, Socioeconomic Institute Email author 
  • , Rainer WinkelmannAffiliated withUniversity of Zurich, Socioeconomic Institute

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Abstract

This study investigates the prevalence and extent of altruism by examining the relationship between parents’ and their adult children’s subjective well-being in a data set extracted from the German Socio-Economic Panel. To segregate the share of parents with altruistic preferences from those who are selfish, we estimate a finite mixture regression model. We control for various sources of potential bias by taking advantage of the data’s panel structure. To validate our modeling approach, we show that predicted altruists indeed make higher average transfer payments.

Keywords

Altruism Subjective well-being Finite mixture regression models

JEL Classification

C23 D64