Shaping intergenerational relationships the demonstration effect

Jellal, Mohamed and wolff, François charles (2000): Shaping intergenerational relationships the demonstration effect. Published in: Economics Letters , Vol. 68 (2,

Abstract

According to the demonstration effect theory, parents make intergenerational transfers to their elders in order to elicit a symmetric future behavior from their children. In this paper we show that upstream transfers are expected to increase with low returns from alternative financial assets and with the donor’s life expectancy. The latter effect creates a greater incentive for daughters to care for parents.

• Item Type: MPRA Paper
• Language: English
• Keywords: Family ,Intergenerational transfer, Demonstration effect, Imitation
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics

References

Becker, G.S., 1991. A Treatise on the Family, Harvard University Press, Cambridge.

Bergstrom, T.C., 1996. Economics in a family way. Journal of Economic Literature 34, 1903–1934.

Bergstrom, T.C., Stark, O., 1993. How a ltruism can prevail under natural selection. American Economic Review 83, 149–155.

Cigno, A., 1993. Intergenerational transfers without altruism: family, market and state. European Journal of Political Economy 9, 505–518.

Cox, D., 1987. Motives for private income transfers. Journal of Political Economy 95, 508–546.

Cox, D., 1990. Intergenerational transfers and liquidity constraints. Quarterly Journal of Economics 105, 187–218.

Cox, D., Stark, O., 1996. Intergenerational Transfers and the Demonstration Effect, Boston College, Discussion paper.

Cox, D., Stark, O., 1998a. Financial Transfers to the Elderly and the Demonstration Effect, Boston College, Discussion paper.

Cox, D., Stark, O., 1998b. On the Demand for Grandchildren, Tied Transfers, Liquidity Constraints, and the Demonstration Effect, Boston College, Discussion paper.

Huang, C.F., Litzenberger, R.H., 1988. Foundations for Financial Economics, North-Holland, Amsterdam.

Laferre`re, A., 1999. Intergenerational transmission models: a survey. Geneva Papers on Risk and Insurance 24, 2–26.

Wolff, F.C., 2000. Private intergenerational contact in France and the demonstration effect. Applied Economics, In press.