Abstract
We present a theoretical framework to examine whether altruism or exchange is the motive for money-transfers within families. In our theoretical models, transfers for education are incorporated as an additional family transfer that is determined before money-transfers are decided. These models lead to testable implications about the relationship between transfers for education and money-transfers. Various econometric models are derived and estimated with PSID data on inter-vivos transfers and bequests. The empirical evidence is compatible with both altruism or exchange, but provides information about how these motivations work. The comparison between the empirical distribution of money-transfers and the distributions induced by our econometric models shows that these models are suitable.
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