Altruism and efficient allocations in three-generation households

Anna Bartczak*, Wiktor Budziński, Susan Chilton, Rebecca McDonald, Jytte Seested Nielsen

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

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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.
Original languageEnglish
Pages (from-to)113-135
Number of pages23
JournalJournal of Risk and Uncertainty
Volume62
Issue number2
DOIs
Publication statusPublished - 20 Jul 2021

Bibliographical note

Funding Information:
This study was carried out as a part of the project: “Household economics in three-generation families. The role of intra-household altruism in the distribution of common resources for health care” financed by the National Science Centre Poland (OPUS 11, project no. 2016/21/B/HS4/01992). Funding support is gratefully acknowledged.

Publisher Copyright:
© 2021, The Author(s).

Keywords

  • Altruism
  • Efficient allocation
  • Health risk
  • Three-generation households
  • Willingness to pay

ASJC Scopus subject areas

  • Economics and Econometrics
  • Accounting
  • Finance

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