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Welfare-enhancing parental altruism and children’s habit formation

Author

Listed:
  • Lin Zhang

    (Kanazawa Seiryo University)

  • Shinsuke Ikeda

    (Osaka University)

Abstract

We propose a model of parental altruism in relation to children’s habit formation, as children are unaware of their developing habits while young and only become cognizant with age. We show that an altruistic mother (1) maintains the amount of income transferred to her child lower than the child would desire and (2) reduces further income transfer upon an exogenous increase in case of a particular negative habit of the child. The child, when grown, may end up being grateful for the small income transfer if the mother is sufficiently altruistic and has a relatively high income: When evaluated by the realized habitual preferences, a small income transfer leads to greater welfare. This implies that parents from richer families tend to appreciate the authoritative parenting practice.

Suggested Citation

  • Lin Zhang & Shinsuke Ikeda, 2016. "Welfare-enhancing parental altruism and children’s habit formation," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 63(3), pages 281-303, September.
    • Handle: RePEc:spr:inrvec:v:63:y:2016:i:3:d:10.1007_s12232-016-0255-2
    DOI: 10.1007/s12232-016-0255-2
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    Cited by:

    1. Lin Zhang & Shinsuke Ikeda, 2018. "Intergenerational Transmission of Authoritative Parenting Style: Evidence from Japan," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(1), pages 64-73, January.
    2. Lin Zhang, 2021. "Education Expenditure and Parenting Styles: Evidence from Cognitive Development in China," Journal of Family and Economic Issues, Springer, vol. 42(4), pages 729-744, December.

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    More about this item

    Keywords

    Habit formation; Parental altruism; Welfare-enhancing; Time preference;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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