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Why Do People Leave Bequests? For Love or Self-Interest? Evidence from a New International Survey of Bequest Plans

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  • Charles Yuji Horioka

    (School of Economics, University of the Philippines Diliman)

Abstract

This paper discusses three alternative assumptions concerning household preferences (altruism, self-interest, and a desire for dynasty building) and shows that these assumptions have very different implications for bequest motives and bequest division. After reviewing some of the literature on actual bequests, bequest motives, and bequest division, the paper presents data on the strength of bequest motives, stated bequest motives, and bequest division plans from a new international survey conducted in China, India, Japan, and the United States. It finds striking inter-country differences in bequest plans, with the bequest plans of Americans and Indians appearing to be much more consistent with altruistic preferences than those of the Japanese and Chinese and the bequest plans of the Japanese and Chinese appearing to be much more consistent with selfish preferences than those of Americans and Indians. These findings have important implications for the efficacy and desirability of stimulative fiscal policies, public pensions, and inheritance taxes.

Suggested Citation

  • Charles Yuji Horioka, 2014. "Why Do People Leave Bequests? For Love or Self-Interest? Evidence from a New International Survey of Bequest Plans," UP School of Economics Discussion Papers 201406, University of the Philippines School of Economics.
    • Handle: RePEc:phs:dpaper:201406
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    File URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1459
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    More about this item

    Keywords

    Bequests; inheritances; estates; inter vivos transfers; intergenerational transfers; bequest motives; bequest division; equal division; altruism; selfishness; selfish life cycle model; altruism model; dynasty model; primogeniture; selfish exchange model; culture; religiosity; religion;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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