Chapter 2 The Empirical Analysis of Transfer Motives

The empirical economic literature covers many different forms of pro-social behaviour going from anonymous charitable contributions to caring for an ageing parent or buying Christmas gifts. The chapter focuses on the meta-questions concerning the motivations underlying this behaviour. While the public goods-model of altruism has played a pivotal role in the economic work, the discussion in the chapter is structured around a simple list of motivations, derived from the psychological literature. Altruism (or empathy) is only one of the many motivations leading to voluntary transfers. Transfers may also follow from a feeling of duty or because the donor wants to obey social norms. They may be part of reciprocal arrangements, which finally are in the self-interest of all the parties involved. They may reflect pure materialistic egoism or a desire to gain social prestige. The survey of the empirical literature makes a distinction between one-way transfers where there is no real social interaction between the donor and the recipient and two-way transfers, i.e. interpersonal gifts that take place in a non-anonymous setting. The former refer to contributions of money and time to charities, the latter refer to interhousehold and intrafamily transfers. It is argued that the simple oppositions between pure altruism and warm glow or between altruism and exchange are insufficient, and that we should more explicitly think about how to distinguish the different warm glow or exchange-interpretations from one another. Traditional economic methods of indirect testing for motivational differences will probably be insufficient for this task. A better insight into the different motivations for pro-social behaviour is important for its own sake. It is also necessary for understanding the consequences of government intervention (the crowding-out effect) or the behaviour of charities.