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Altruism and efficient allocations in three-generation households

Author

Listed:
  • Anna Bartczak

    (University of Warsaw)

  • Wiktor Budziński

    (University of Warsaw)

  • Susan Chilton

    (Newcastle University)

  • Rebecca McDonald

    (University of Birmingham)

  • Jytte Seested Nielsen

    (Newcastle University)

Abstract

In this paper we test the efficiency of family resource allocation in three-generation households. Understanding how the so-called “squeezed middle” generation allocates resources towards the children and grandparents in the household will be increasingly important as populations age, and more elderly people become dependent upon their relations for financial support. Despite a large literature on household resource allocation in two-generation households (parents and children), to the best of our knowledge ours is the first study that includes the third generation. We present a theoretical model and conduct a discrete choice experiment in the context of reductions in the lifetime risk of developing coronary artery disease to verify the efficient resource allocation hypothesis. The data is obtained from a large sample of the Polish population. The sample consists of the middle generation members of three-generation households and hence WTP represents household value from the perspective of the “squeezed middle” parent. The results imply that household resource allocation is efficient. This has implications for understanding the likely response to government financial support aimed at supporting elderly people and their families.

Suggested Citation

  • Anna Bartczak & Wiktor Budziński & Susan Chilton & Rebecca McDonald & Jytte Seested Nielsen, 2021. "Altruism and efficient allocations in three-generation households," Journal of Risk and Uncertainty, Springer, vol. 62(2), pages 113-135, April.
    • Handle: RePEc:kap:jrisku:v:62:y:2021:i:2:d:10.1007_s11166-021-09350-z
    DOI: 10.1007/s11166-021-09350-z
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    More about this item

    Keywords

    Altruism; Efficient allocation; Three-generation households; Health risk; Willingness to pay;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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