Voluntary transfers among Italian households: altruistic and non-altruistic explanations

Abstract

The Bank of Italy survey of household budgets is analysed in the light of recent theories of voluntary private transfers. A series of tests reveals that the altruistic model, the simple exchange model, and the one based on the preference-shaping hypothesis are rejected by the data. By contrast, the strategic self-interest model, which explains transfers as part of self-enforcing intergenerational credit agreements, cannot be rejected. We find, in particular, that monetary transfers between Italian households are mainly destined to children up to 30. Moreover, our results reinforce the conclusion that participating in an informal credit arrangement has a fixed cost for the lender. One of the policy implications is that a modest redistribution programme could be effective.