Working Paper: NBER ID: w20158
Authors: Charles Yuji Horioka
Abstract: This paper discusses three alternative assumptions concerning household preferences (altruism, self-interest, and a desire for dynasty building) and shows that these assumptions have very different implications for bequest motives and bequest division. After reviewing some of the literature on actual bequests, bequest motives, and bequest division, the paper presents data on the strength of bequest motives, stated bequest motives, and bequest division plans from a new international survey conducted in China, India, Japan, and the United States. It finds striking inter-country differences in bequest plans, with the bequest plans of Americans and Indians appearing to be much more consistent with altruistic preferences than those of the Japanese and Chinese and the bequest plans of the Japanese and Chinese appearing to be much more consistent with selfish preferences than those of Americans and Indians. These findings have important implications for the efficacy and desirability of stimulative fiscal policies, public pensions, and inheritance taxes.
Keywords: bequest plans; altruism; self-interest; household preferences; international survey
JEL Codes: D12; D14; D64; D91; E21; H31; J14; P52; Z12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Altruistic preferences (D64) | Bequest plans (D14) |
| Selfish preferences (D11) | Bequest plans (D14) |
| Cultural factors (Z10) | Bequest plans (D14) |
| Economic conditions (E66) | Bequest plans (D14) |
| Social safety nets (I38) | Altruistic bequests (D64) |
| Bequest plans (D14) | Descendants' outcomes (J11) |
| Cultural norms (Z13) | Bequest behavior (D15) |