Intergenerational Transfers and Altruism

Asia Sikora, Cornell University
Elizabeth Peters, Cornell University

Previous literature has focused on observable family characteristics to explain intergenerational transfers. Specifically, economic theory focuses on resources of donors and needs of recipients. In this paper we asses the power of subjective measures of altruism to explain intergenerational transfers. We use hypothetical questions asked in the HRS that assess individuals’ willingness to transfer income to others to construct several measures of altruism. The Sweepstakes Questions examine how respondents would allocate money from an exogenous shock to their income. The Conditional Transfer Questions examine to what extent individuals say they are willing to transfer some of their income to others conditional on financial need. We include these measures in economic models of intergenerational transfers to evaluate the additional explanatory power of measures of preferences. Preliminary results indicate that both of these measures predict the likelihood of transfers over and above the standard explanatory variables used in analyses of intergenerational transfers.