Economic analysis demonstrates that inter vivos transfers align with exchange motives rather than altruism, suggesting critical impacts on public welfare distribution.
Private income transfers are becoming increasingly recognized as a key aspect of the U.S. economy. The majority of private income transfers occur inter vivos (i.e., between living persons), but very little is known about this type of transfer behavior. This paper tests alternative hypotheses concerning motivation for inter vivos transfers. Two motives are considered: altruism and exchange. Evidence presented here casts doubt on the altruistic model of transfer behavior. Observed patterns for inter vivos transfers are more consistent with exchange-related motives. This finding has important implications for the effects of public transfer programs on the distribution of economic well-being.
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Donald Cox (1987) studied this question.
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