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Testing the altruism hypothesis with italian cohort data

Rizza, Pietro (2008): Testing the altruism hypothesis with italian cohort data.

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Abstract

In this paper I follow Abel and Kotlikoff 1994 non-parametric approach based on consumption cohort data to test for intergenerational altruism among Italian households. The Italian socio-economic framework represents an interesting ground to test for the Barro’s 1974 model given the stronger family linkages usually present among Italian households. All tests reject altruism. Further, I evaluate how restrictive is the assumption of a zero correlation between the clan’s Euler errors and the demographic structure of the clan. I find no evidence of any major role played by the age composition of the clan and conclude that the zero correlation assumption is reasonable.

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