When people make donations to privately provided public goods, such as charity, there may be many factors influencing their decision other than altruism. Social pressure, guilt, sympathy, or simply a desire for a "warm glow" may all be important. This paper considers such impure altruism formally and develops a wide set of implications. In particular, this paper discusses the invariance proposition of public goods, solves for the sufficient conditions for neutrality to hold, examines the optimal tax treatment of charitable giving, and calibrates the model based on econometric studies in order to consider policy experiments. Impure altruism is shown to be more consistent with observed patterns of giving than the conventional pure altruism approach, and to have policy implications that may differ widely from those of the conventional models. Copyright 1990 by Royal Economic Society.

https://creationetfinancement.files.wordpress.com/2012/12/impure-altruism-and-donations-to-public-goods.pdf

Impure altruism and donations to public goods: a theory of warm-glow giving*

A Treatise on the Family. G. S. Becker. Cambridge, MA: Harvard University Press. 1981. Gary Becker is one of the most famous and influential economists of the second half of the 20th century, a fervent contributor to and expounder of the University of Chicago free-market philosophy, and winner of the 1992 Nobel Prize in economics. Although any book with the word "treatise" in its title is clearly intended to have an impact, one coming from someone as brilliant and controversial as Becker certainly had such a lofty goal. It has received many article-length reviews in several disciplines (Ben-Porath, 1982; Bergmann, 1995; Foster, 1993; Hannan, 1982), which is one measure of its scholarly importance, and yet its impact is, I think, less than it may have initially appeared, especially for scholars with substantive interests in the family. This book is, its title notwithstanding, more about economics and the economic approach to behavior than about the family. In the first sentence of the preface, Becker writes "In this book, I develop an economic or rational choice approach to the family." Lest anyone accuse him of focusing on traditional (i.e., material) economics topics, such as family income, poverty, and labor supply, he immediately emphasizes that those topics are not his focus. "My intent is more ambitious: to analyze marriage, births, divorce, division of labor in households, prestige, and other non-material behavior with the tools and framework developed for material behavior." Indeed, the book includes chapters on many of these issues. One chapter examines the principles of the efficient division of labor in households, three analyze marriage and divorce, three analyze various child-related issues (fertility and intergenerational mobility), and others focus on broader family issues, such as intrafamily resource allocation. His analysis is not, he believes, constrained by time or place. His intention is "to present a comprehensive analysis that is applicable, at least in part, to families in the past as well as the present, in primitive as well as modern societies, and in Eastern as well as Western cultures." His tone is profoundly conservative and utterly skeptical of any constructive role for government programs. There is a clear sense of how much better things were in the old days of a genderbased division of labor and low market-work rates for married women. Indeed, Becker is ready and able to show in Chapter 2 that such a state of affairs was efficient and induced not by market or societal discrimination (although he allows that it might exist) but by small underlying household productivity differences that arise primarily from what he refers to as "complementarities" between caring for young children while carrying another to term. Most family scholars would probably find that an unconvincingly simple explanation for a profound and complex phenomenon. What, then, is the salient contribution of Treatise on the Family? It is not literally the idea that economics could be applied to the nonmarket sector and to family life because Becker had already established that with considerable success and influence. At its core, microeconomics is simple, characterized by a belief in the importance of prices and markets, the role of self-interested or rational behavior, and, somewhat less centrally, the stability of preferences. It was Becker's singular and invaluable contribution to appreciate that the behaviors potentially amenable to the economic approach were not limited to phenomenon with explicit monetary prices and formal markets. Indeed, during the late 1950s and throughout the 1960s, he did undeniably important and pioneering work extending the domain of economics to such topics as labor market discrimination, fertility, crime, human capital, household production, and the allocation of time. Nor is Becker's contribution the detailed analyses themselves. Many of them are, frankly, odd, idiosyncratic, and off-putting. …

A Treatise on the Family

This article defines social resilience as the ability of groups or communities to cope with external stresses and disturbances as a result of social, political and environmental change. This definition highlights social resilience in relation to the concept of ecological resilience which is a characteristic of ecosystems to maintain themselves in the face of disturbance. There is a clear link between social and ecological resilience, particularly for social groups or communities that are dependent on ecological and environmental resources for their livelihoods. But it is not clear whether resilient ecosystems enable resilient communities in such situations. This article examines whether resilience is a useful characteristic for describing the social and economic situation of social groups and explores potential links between social resilience and ecological resilience. The origins of this interdisciplinary study in human ecology, ecological economics and rural sociology are reviewed, and a study of the impacts of ecological change on a resource- dependent community in contemporary coastal Vietnam in terms of the resilience of its institu- tions is outlined. I Introduction The concept of resilience is widely used in ecology but its meaning and measurement are contested. This article argues that it is important to learn from this debate and to explore social resilience, both as an analogy of how societies work, drawing on the ecological concept, and through exploring the direct relationship between the two phenomena of social and ecological resilience. Social resilience is an important component of the circumstances under which individuals and social groups adapt to environmental change. Ecological and social resilience may be linked through the dependence on ecosystems of communities and their economic activities. The question is, then, whether societies dependent on resources and ecosystems are themselves less resilient. In addition, this analysis allows consideration of whether institutions

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Social and Ecological Resilience: Are They Related?

The configuration of developed countries has become today diverse and multiethnic due to international migration. A single coherent theoretical explanation for international migration is lacking. The aim of this discussion was the generation and integration of current theories that clarify basic assumptions and hypotheses of the various models. Theories were differentiated as explaining the initiation of migration and the perpetuation of international movement. Initiation theories discussed were 1) macro theories of neoclassical economics; 2) micro theories of neoclassical economics; 3) the new economics with examples for crop insurance markets futures markets unemployment insurance and capital markets; 4) dual labor market theory and structural inflation motivational problems economic dualism and the demography of labor supply; and 5) world systems theory and the impacts of land raw materials labor material links ideological links and global cities. Perpetuation theories were indicated as network theories of declining risks and costs; institutional theory cumulative causation through distribution of income and land organization of agrarian production culture of migration regional distribution of human capital and social labeling factors; and migration systems theory. The assumptions and propositions of these theories although divergent were not inherently contradictory but had very different implications for policy formulation. The policy decisions over the next decades will be very important and carry with them the potential for misunderstanding and conflict. Policy options based on the explicated models range from regulation by changing wages and employment conditions in destination countries or promoting development in countries of origin to changing structural market economic relations.

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Theories of international migration: a review and appraisal.

Returns to investment in education: A global update

This paper reviews selected theoretical and empirical developments in the field of labor migration economics. The migration behavior of individuals differs in accordance with their perceived relative deprivation; those who are relatively more deprived tend to have stronger incentive to migrate than those who are relatively less deprived. Moreover a reference group characterized by more income inequality is likely to generate more relative deprivation. Highly skilled workers are also more likely to migrate. Migration decisions are often made jointly by the migrant and nonmigrant with a contractual arrangement regarding the sharing of costs and returns. The exchange of commitments to share income provides coinsurance. Of particular interest are the determinants of the speed of adoption of migration as an innovation and the characteristics associated with the delay in the adoption of innovation. New econometric techniques including techniques for the analysis of qualitative dependent variables techniques that correct for sample selection bias and those for the analysis of longitudinal data have substantially benefited empirical research in this area. New methods that can correct for the biased estimate of the wages particular individuals would receive at 2 or more locations at the same point in time allow researchers to test locational decsion making models. Estimates of these structural models of labor migration support the hypothesis that individuals respond to income incentives in making the decsion to migrate. Further research is needed on the pazzling observation that migrant workers earn less than native-born workers with similar characteristics during the 1st few years after migration but more thereafter. Other topics that need further research include the macroeconomic effects of migration the microeconomic and macroeconomic relationships between aging and labor migration and the migration behavior of dual-earner families.

The new economics of labor migration

In this article a theory of motivations to send remittances is described and tested with data from Botswana. Altruism is one of the motivations tested and found to be an insufficient explanation for remittances among migrants in Botswana. A refinement of the model stipulates a modified altruism or "enlightened self-interest." In this model the relationship between the migrant and family is tempered by an implicit understanding of mutual benefit. The household strategy may be to encourage some members to migrate as a means of spreading risk and sharing gains. The household strategy is similar to an insurance policy where migration is to places where market potential is high. The risks incurred might be high. The example is given of migration during a drought in Botswana. Migrant remittances were greater in households with more cattle or households with more to lose. Drought alone was not statistically related to remittances. Increases in remittances were related to increased levels of education. It is suggested that repayment was the motive for parents investment in migrants education. Migrants gains are identified as the potential for an inheritance the security of channeling investments through a trusted family member and security in having a home to return to. It is pointed out that the altruism and family remittances from urban migration were strategies that bridged the simple dynamic of either urban development or rural development impacting on family welfare. It is suggested that household models of economy adopt some measure to express the relationship of household wealth to remittances from urban migrants.

Motivations to Remit: Evidence from Botswana

Preface Introduction Part I: Overviews Part II: Migration and Risk Part III: A Relative Deprivation Approach to Migration Part IV: Labour Migration Under Alternative Informational Regimes Part V: Migrants' Remittances: Motives, Consequences and Inequality Implications Part VI: Planning with Migration Part VII: The Economic Performance of Migrants.

The Migration of Labor

A significant proportion of migration in low-income countries, particularly in rural areas, is composed of moves by women for the purpose of marriage. We seek to explain these mobility patterns by examining marital arrangements among Indian households. In particular, we hypothesize that the marriage of daughters to locationally distant, dispersed yet kinship-related households is a manifestation of implicit interhousehold contractual arrangements aimed at mitigating income risks and facilitating consumption smoothing in an environment characterized by information costs and spatially covariant risks. Analysis of longitudinal South Indian village data lends support to the hypothesis. Marriage cum migration contributes significantly to a reduction in the variability of household food consumption. Farm households afflicted with more variable profits tend to engage in longer-distance marriage cum migration. The hypothesized and observed marriage cum migration patterns are in dissonance with standard models of marriage or migration that are concerned primarily with search costs and static income gains.

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Consumption Smoothing, Migration, and Marriage: Evidence from Rural India

The authors explore the role of relative deprivation versus absolute income as an incentive for migration in developing countries. "In Section I of this paper we outline the relative deprivation model of migration and present an illustration of the divergent policy implications of a relative deprivation model versus an absolute income model. An attempt is made to identify distinct empirical implications of relative and absolute income motives for migrating. In Section II a migration decision model is estimated and is used to explore absolute and relative income motives for internal and international migration in a sample of rural Mexican households as well as to test the extent to which discontinuity in labour markets shapes the choice of migrant destination. In Section III we present our conclusions." (EXCERPT)

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Oded Stark

Papers

The new economics of labor migration

Motivations to Remit: Evidence from Botswana

The Migration of Labor

Consumption Smoothing, Migration, and Marriage: Evidence from Rural India

Migration incentives migration types: the role of relative deprivation.