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 language | English |
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Pages (from-to) | 113-135 |
Number of pages | 23 |
Journal | Journal of Risk and Uncertainty |
Volume | 62 |
Issue number | 2 |
DOIs | |
Publication status | Published - 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