Motives for pocket money allowance and family incentives

Abstract

To explain motives underlying intergenerational transfers within the family, economists suggest three theoretical hypotheses: altruism, exchange and endogenous altruism due to preference shaping. In this paper we seek to identify family motives for private transfers in France, through the study of pocket money. Using a particularly rich survey carried out in 1992 about parental transfers to young children, our econometric analysis puts forward the heterogeneity of family motivations. The standard assumption according to which a single motive may be universally true is rejected by the data. At a disaggregated level, regular payments must be distinguished from irregular ones. The former fit in an intertemporal framework, the latter are nearer altruistic motives. But among them, buying of children's services and school rewards also exist. © 2002 Elsevier Science B.V. All rights reserved.