Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/phs/dpaper/201406.html
   My bibliography  Save this paper

Why Do People Leave Bequests? For Love or Self-Interest? Evidence from a New International Survey of Bequest Plans

Author

Listed:
  • Charles Yuji Horioka

    (School of Economics, University of the Philippines Diliman)

Abstract
This paper discusses three alternative assumptions concerning household preferences (altruism, self-interest, and a desire for dynasty building) and shows that these assumptions have very different implications for bequest motives and bequest division. After reviewing some of the literature on actual bequests, bequest motives, and bequest division, the paper presents data on the strength of bequest motives, stated bequest motives, and bequest division plans from a new international survey conducted in China, India, Japan, and the United States. It finds striking inter-country differences in bequest plans, with the bequest plans of Americans and Indians appearing to be much more consistent with altruistic preferences than those of the Japanese and Chinese and the bequest plans of the Japanese and Chinese appearing to be much more consistent with selfish preferences than those of Americans and Indians. These findings have important implications for the efficacy and desirability of stimulative fiscal policies, public pensions, and inheritance taxes.

Suggested Citation

  • Charles Yuji Horioka, 2014. "Why Do People Leave Bequests? For Love or Self-Interest? Evidence from a New International Survey of Bequest Plans," UP School of Economics Discussion Papers 201406, University of the Philippines School of Economics.
    • Handle: RePEc:phs:dpaper:201406
    as

    Download full text from publisher

    File URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1459
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    2. Sankar Mukhopadhyay, 2011. "Religion, religiosity and educational attainment of immigrants to the USA," Review of Economics of the Household, Springer, vol. 9(4), pages 539-553, December.
    3. Tomes, Nigel, 1981. "The Family, Inheritance, and the Intergenerational Transmission of Inequality," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 928-958, October.
    4. Wolff, Francois-Charles & Laferrere, Anne, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 13, pages 889-969, Elsevier.
    5. B. Douglas Bernheim & Sergei Severinov, 2003. "Bequests as Signals: An Explanation for the Equal Division Puzzle," Journal of Political Economy, University of Chicago Press, vol. 111(4), pages 733-764, August.
    6. Thomas A. Barthold & Takatoshi Ito, 1992. "Bequest Taxes and Accumulation of Household Wealth: U.S.-Japan Comparison," NBER Chapters, in: The Political Economy of Tax Reform, pages 235-292, National Bureau of Economic Research, Inc.
    7. José Molina, 2013. "Altruism in the household: in kind transfers in the context of kin selection," Review of Economics of the Household, Springer, vol. 11(3), pages 309-312, September.
    8. Abel, Andrew B & Warshawsky, Mark, 1988. "Specification of the Joy of Giving: Insights from Altruism," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 145-149, February.
    9. Stark, Oded, 1998. "Equal bequests and parental altruism: compatibility or orthogonality?," Economics Letters, Elsevier, vol. 60(2), pages 167-171, August.
    10. Dunn, Thomas A. & Phillips, John W., 1997. "The timing and division of parental transfers to children," Economics Letters, Elsevier, vol. 54(2), pages 135-137, February.
    11. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1997. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1121-1166, December.
    12. Kotlikoff, Laurence J, 1988. "Intergenerational Transfers and Savings," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 41-58, Spring.
    13. Cox, Donald, 1987. "Motives for Private Income Transfers," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 508-546, June.
    14. Charles Yuji Horioka, 2002. "Are the Japanese Selfish, Altruistic or Dynastic?," The Japanese Economic Review, Japanese Economic Association, vol. 53(1), pages 26-54, March.
    15. Charlet Yuji Horioka, 2002. ""Are the Japanese Selfish, Altruistic, or Dynastic?" (in Japanese)," CIRJE J-Series CIRJE-J-70, CIRJE, Faculty of Economics, University of Tokyo.
    16. Yannis M. Ioannides & Kamhon Kan, 2000. "The Nature of Two-directional Intergenerational Transfers of Money and Time: An Empirical Analysis," International Economic Association Series, in: L.-A. Gérard-Varet & S.-C. Kolm & J. Mercier Ythier (ed.), The Economics of Reciprocity, Giving and Altruism, chapter 18, pages 314-331, Palgrave Macmillan.
    17. Donald Cox & Oded Stark, 1993. "Intergenerational Transfers And Demonstration Effect," Boston College Working Papers in Economics 244, Boston College Department of Economics.
    18. Arrondel, Luc & Masson, Andre, 2006. "Altruism, exchange or indirect reciprocity: what do the data on family transfers show?," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 14, pages 971-1053, Elsevier.
    19. Takatoshi Ito & Anne O. Krueger, 1992. "The Political Economy of Tax Reform," NBER Books, National Bureau of Economic Research, Inc, number ito_92-2.
    20. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986. "The Strategic Bequest Motive," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 151-182, July.
    21. Ken Yamada, 2006. "Intra-family transfers in Japan: intergenerational co-residence, distance, and contact," Applied Economics, Taylor & Francis Journals, vol. 38(16), pages 1839-1861.
    22. Ohtake, F., 1991. "Bequest Motives of Aged Households in Japan," ISER Discussion Paper 0249, Institute of Social and Economic Research, Osaka University.
    23. Kotlikoff, Laurence J & Spivak, Avia, 1981. "The Family as an Incomplete Annuities Market," Journal of Political Economy, University of Chicago Press, vol. 89(2), pages 372-391, April.
    24. C. Y. Horioka & H. Fujisaki & W. Watanabe & T. Kouno, 2000. "Are Americans More Altruistic than the Japanese? A U.S.-Japan Comparison of Saving and Bequest Motives," International Economic Journal, Taylor & Francis Journals, vol. 14(1), pages 1-31.
    25. Horioka, Charles Yuji, 2009. "Do bequests increase or decrease wealth inequalities?," Economics Letters, Elsevier, vol. 103(1), pages 23-25, April.
    26. Ito, Takatoshi & Krueger, Anne O. (ed.), 1992. "The Political Economy of Tax Reform," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226386676.
    27. Audrey Light & Kathleen McGarry, 2004. "Why Parents Play Favorites: Explanations for Unequal Bequests," American Economic Review, American Economic Association, vol. 94(5), pages 1669-1681, December.
    28. Davies, James B, 1981. "Uncertain Lifetime, Consumption, and Dissaving in Retirement," Journal of Political Economy, University of Chicago Press, vol. 89(3), pages 561-577, June.
    29. Cox, Donald & Rank, Mark R, 1992. "Inter-vivos Transfers and Intergenerational Exchange," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 305-314, May.
    30. Ohtake, Fumio, 1991. "Bequest Motive, Saving and Labor Supply of Aged Household in Japan ," Economic Review, Hitotsubashi University, vol. 42(1), pages 21-30, January.
    31. Fumio Hayashi, 1986. "Why Is Japan's Saving Rate So Apparently High?," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 147-234, National Bureau of Economic Research, Inc.
    32. Kevin Wiseman & Ctirad Slavık, 2009. "Tough Love For Lazy Kids," 2009 Meeting Papers 1091, Society for Economic Dynamics.
    33. Esping-Andersen, Gosta, 1999. "Social Foundations of Postindustrial Economies," OUP Catalogue, Oxford University Press, number 9780198742005.
    34. Evelyn Lehrer, 2004. "Religiosity as a Determinant of Educational Attainment: The Case of Conservative Protestant Women in the United States," Review of Economics of the Household, Springer, vol. 2(2), pages 203-219, June.
    35. Modigliani, Franco, 1988. "The Role of Intergenerational Transfers and Life Cycle Saving in the Accumulation of Wealth," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 15-40, Spring.
    36. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1.
    37. Horioka, C.Y. & Fujisaki, H. & Watanabe, W. & Kouno, T., 2000. "Are Americans more Altruistic than the Japanese Comparison of Saving and Bequest Motives," ISER Discussion Paper 0487, Institute of Social and Economic Research, Osaka University.
    38. McGarry, Kathleen, 1999. "Inter vivos transfers and intended bequests," Journal of Public Economics, Elsevier, vol. 73(3), pages 321-351, September.
    39. Wilhelm, Mark O, 1996. "Bequest Behavior and the Effect of Heirs' Earnings: Testing the Altruistic Model of Bequests," American Economic Review, American Economic Association, vol. 86(4), pages 874-892, September.
    40. Dekle, Robert, 1989. "The unimportance of intergenerational transfers in Japan," Japan and the World Economy, Elsevier, vol. 1(4), pages 403-413, November.
    41. World Bank, 2013. "World Development Indicators 2013," World Bank Publications - Books, The World Bank Group, number 13191.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stefania Basiglio & Maria Cristina Rossi & Arthur van Soest, 2023. "Subjective Inheritance Expectations and Economic Outcomes," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(4), pages 1088-1113, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Charles Horioka, 2014. "Are Americans and Indians more altruistic than the Japanese and Chinese? Evidence from a new international survey of bequest plans," Review of Economics of the Household, Springer, vol. 12(3), pages 411-437, September.
    2. Ramon L. Clarete & Ernesto M. Pernia & Ammielou Gaduena & Adrian Mendoza, 2014. "The Role of Science, Technology and Research in Economic Development," UP School of Economics Discussion Papers 201407, University of the Philippines School of Economics.
    3. Charles Yuji Horioka, 2002. "Are the Japanese Selfish, Altruistic or Dynastic?," The Japanese Economic Review, Japanese Economic Association, vol. 53(1), pages 26-54, March.
    4. Charles Yuji Horioka, 2021. "Is the selfish life-cycle model more applicable in Japan and, if so, why? A literature survey," Review of Economics of the Household, Springer, vol. 19(1), pages 157-187, March.
    5. Charles Yuji Horioka & Emin Gahramanov & Aziz Hayat & Xueli Tang, 2018. "Why Do Children Take Care Of Their Elderly Parents? Are The Japanese Any Different?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(1), pages 113-136, February.
    6. Wolff, Francois-Charles & Laferrere, Anne, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 13, pages 889-969, Elsevier.
    7. Marta Melguizo Garde, 2007. "La motivación de las transmisiones lucrativas entre generaciones de una familia: modelos teóricos y evidencia empírica," Hacienda Pública Española / Review of Public Economics, IEF, vol. 181(2), pages 81-118, June.
    8. Stefan Hochguertel & Henry Ohlsson, 2009. "Compensatory inter vivos gifts," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(6), pages 993-1023.
    9. Arrondel, Luc & Masson, Andre, 2006. "Altruism, exchange or indirect reciprocity: what do the data on family transfers show?," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 14, pages 971-1053, Elsevier.
    10. Elin Halvorsen & Thor O. Thoresen, 2011. "Parents' Desire to Make Equal Inter Vivos Transfers," CESifo Economic Studies, CESifo Group, vol. 57(1), pages 121-155, March.
    11. Laitner, John & Ohlsson, Henry, 2001. "Bequest motives: a comparison of Sweden and the United States," Journal of Public Economics, Elsevier, vol. 79(1), pages 205-236, January.
    12. Francois-Charles Wolff & Seymour Spilerman & Claudine Attias-Donfut, 2005. "Do Parents Help More their Less Well-Off Children? Evidence from a Sample of Migrants to France," Microeconomics 0504001, University Library of Munich, Germany.
    13. Oscar Erixson & Henry Ohlsson, 2019. "Estate division: equal sharing, exchange motives, and Cinderella effects," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(4), pages 1437-1480, October.
    14. Yang-Ming Chang, 2007. "Transfers and bequests: a portfolio analysis in a Nash game," Annals of Finance, Springer, vol. 3(2), pages 277-295, March.
    15. Olivera, Javier, 2017. "The division of inter-vivos parental transfers in Europe," The Journal of the Economics of Ageing, Elsevier, vol. 9(C), pages 41-51.
    16. Horioka, Charles Yuji, 2020. "Does the Selfish Life-Cycle Model Apply in the Case of Japan?," AGI Working Paper Series 2020-04, Asian Growth Research Institute.
    17. Junya Hamaaki & Masahiro Hori & Keiko Murata, 2019. "The intra-family division of bequests and bequest motives: empirical evidence from a survey on Japanese households," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(1), pages 309-346, January.
    18. Audrey Light & Kathleen McGarry, 2004. "Why Parents Play Favorites: Explanations for Unequal Bequests," American Economic Review, American Economic Association, vol. 94(5), pages 1669-1681, December.
    19. Wojciech Kopczuk, 2012. "Taxation of Intergenerational Transfers and Wealth," NBER Working Papers 18584, National Bureau of Economic Research, Inc.
    20. Mauro Baranzini, 2005. "Modigliani's life-cycle theory of savings fifty years later," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 109-172.

    More about this item

    Keywords

    Bequests; inheritances; estates; inter vivos transfers; intergenerational transfers; bequest motives; bequest division; equal division; altruism; selfishness; selfish life cycle model; altruism model; dynasty model; primogeniture; selfish exchange model; culture; religiosity; religion;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:phs:dpaper:201406. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: RT Campos (email available below). General contact details of provider: https://edirc.repec.org/data/seupdph.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.