Bequest motives revisited:Evidence from a randomized choice

experiment

Valerie Mueller¹ and Ayala Wineman²¹International Food Policy Research Institute, USA

²Department of Agricultural, Food, and Resource Economics, Michigan State University, USA

March 24, 20142014 World Bank Conference on Land and Poverty

Rules of bequest

EGALITARIANEqual division of resources, accounting for both inter-vivos (pre-mortem) and post-mortem transfers

EVOLUTIONARYResources are directed toward individuals that share one’s genes (Cox 2003).

ALTRUISMParents allocate bequests to equalize the marginal value of the transfer for each child (Becker 1974).

EXCHANGEParents exchange bequests for child-provided services, like remittances, care, or insurance (Bernheim et al. 1985).

ALTRUISM

Parent’s problem:

Max U(Coj, y1j, y2j, … , yNj)Lifetime wealth of child 1

s.t. yij = hij + bij

Endowment of child i

Bequest for child i

Coj + = Yj Family wealth F.O.C. solution: yij = f(Yj, )

…This doesn’t vary across children.

Rules of bequest

EXCHANGE

And if a parent needs help: P

Q

Child’s supply

Parent’s new demand

Parent’s problem:Max U(Cj, S) Child-provided

service

Rules of bequest

Kagera, Tanzania

Summary statisticsMen Women

No. respondents 895 1,673Born in current village 45.1% 19.9%Avg. no. work hours in previous week 37.7 55.3Brought land to own marriage 55.2% 6.0%Brought non-land assets to own marriage 60.0% 17.2%

A randomized choice experiment

“Imagine that you are married and have 4 adult children [Children’s sex and marital status assigned randomly]. Your spouse and all four children are still alive. If (GOD FORBID) you were to die...• What share of LAND would your spouse, each of the children and

anyone else inherit? • What share of MONEY and NON-LAND ASSETS would your spouse,

each of the children and anyone else inherit?”

Patterns of land bequests (experiment)

Men (heads)

(a)

Women (wives)

(b)

Women (heads)

(c)

Testa ≠ b

Testb ≠ c

Equal division of estate among children

0.55 (0.50)

0.61(0.49)

0.76(0.42)

* ***

Boy-girl gap 8.51(14.10)

5.93(13.08)

3.30(10.46)

*** ***

Inequality index 8.52(12.12)

7.35(11.88)

4.16(9.27)

* ***

% for children 66.54(18.60)

66.72(21.48)

75.28(24.46)

***

% for spouse 32.98(18.56)

32.99(21.52)

23.94(24.60)

***

Among those with unequal division of estate among children:

Boy-girl gap 17.74(15.83)

15.08(17.24)

14.01(17.77)

*

Inequality index 18.77(11.46)

18.79(12.08)

17.64(11.25)

Average % of children’s bequest by gender and marital status

Women's responses (land)

Women's responses (assets)

Men's responses (land)

Men's responses (assets)

0 10 20 30 40 50 60 70 80 90 100

Married son Unmarried son Married daughter Unmarried daughter

Percent

Determinants of bequest by gender and marital status  (1) (2) (3) (4)  % Children's

land bequest% Children's

land bequest

% Children's asset bequest

% Children's asset

bequest Explanatory variables OLS OLS OLS OLS Married boy -0.812 -0.669 -1.061** -1.383**   (0.521) (0.883) (0.458) (0.622) Married girl -8.187*** -9.167*** -6.904*** -8.437***   (0.651) (0.779) (0.569) (0.760) Unmarried girl -6.686*** -7.535*** -5.707*** -7.211***   (0.504) (0.751) (0.501) (0.686) Female respondent -0.783   -1.595***   (0.816)   (0.516)Female respondent*Married boy -0.304   0.574   (1.128)   (0.699)Female respondent*Married girl 1.831*   2.850***   (0.944)   (0.774)Female respondent*Unmarried girl 1.619   2.837***

  (1.231)   (0.784)Constant 28.955*** 29.364*** 28.452*** 29.295***

(0.348) (0.544) (0.323) (0.454) Observations 9,964 9,964 9,876 9,876 R-squared 0.149 0.152 0.112 0.119 P>F(Married girl = Unmarried girl)

0.001 0.005 0.011 0.020

Robust standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1

Determinants of bequest by respondent characteristics (1)

  (1) (2)  %

Children's land

bequest

% Children's asset

bequest

Explanatory variables OLS OLS Married boy -0.816 -1.081   (0.527) (0.464)Married girl -8.270*** -6.973***   (0.664) (0.583)Unmarried girl -6.736*** -5.760***   (0.513) (0.512)Respondent is too old/sick to work

-1.315 -1.406

  (1.021) (0.864)Old/Sick*Married boy 0.021 0.748  (0.994) (0.906)Old/Sick*Married girl 3.666** 2.987**  (1.618) (1.428)Old/Sick*Unmarried girl 2.153 2.291

  (1.554) (1.442)Constant 28.987*** 29.487***

(0.353) (0.329) Observations 9,964 9,876 R-squared 0.150 0.113 P>F(Married girl = Unmarried girl)

0.001 0.012

Robust standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1

Determinants of bequest by respondent characteristics (2)

  (1) (2)  %

Children's land

bequest

% Children's asset

bequest

Explanatory variables OLS OLS Married boy -0.044 -0.675  (1.151) (1.004)Married girl -9.734*** -9.881***   (1.009) (1.117)Unmarried girl -8.362*** -8.483***   (1.040) (1.001)Work hours in past week -0.013 -0.029***  (0.013) (0.010)Work hours*Married boy -0.016 -0.008  (0.021) (0.017)Work hours*Married girl 0.033* 0.064***  (0.017) (0.017)Work hours*Unmarried girl 0.036* 0.060***

  (0.020) (0.015)Constant 29.559*** 29.764***

(0.671) (0.657) Observations 9,964 9,876 R-squared 0.153 0.122 P>F(Married girl = Unmarried girl)

0.126 0.095

Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

Final Thoughts• Multiple motives are involved in bequests.• These differ according to the parent’s gender and

needs.• We find support for the egalitarian model (for boys

only); strategic bequest; evolutionary motives; and maybe altruism, too.

• We will exploit exogenous variation in access to an equity awareness service. Does this shift exchange motives to more egalitarian practices?

• We hope to collect additional information on heirs at endline.

Thank you!