D64 - Altruism; Philanthropy; Intergenerational TransfersReturn

This study surveys the conventional methods and their limitations in assessing motives for private transfers. Based on the concept of "effective altruism" - a genuine altruist offers help instead of demanding, this study proposes a normative and discriminative strategy to help distinguish the transfer motives, focusing on whether income transfer persists over time. Its application to Chinese interfamily transfers reveals that altruistic motives do exist but play an insignificant role at the aggregate level.

This paper analyses income and charitable giving from the perspective of perception bias. We show that perception bias affects charitable giving through its effects on warm glow, while inequality aversion counteracts these effects. Donors' perception bias regarding a recipient's situation does not necessarily decrease their charitable giving. Specifically, perception bias regarding the recipients' effort and life shock decreases donors' charitable giving. Perception bias regarding the recipients' ability decreases donors' giving to charities designed to help low-ability recipients but increases their giving to charities designed to help high-ability recipients. We also show that perception bias increases with donors' income. Fundraising professionals shall allocate more efforts to those who do not care about inequality that much when correcting the donors' perception bias; focus their efforts on correcting the donors' perception bias, especially for rich donors, when raising money for charities with low-ability recipients; but increase donors' perception bias regarding the recipients' ability when raising money for charities with high-ability recipients.

In this article two original microeconomic models of an externality market are described: (1) model of optimal financial compensation of a damage caused by a negative externality in the economy with agents maximizing probability of their survival (generalized Coase Theorem) and (2) generalized model of optimal financial favour for agents provided a positive externality. Results of the models are compared with the outcomes of the standard microeconomics of subjects maximizing their own profit.

Discussions regarding the form that state transfers should take generally focus on the relative efficiency of transfers in kind vis-à-vis transfers in cash. This article, however, proposes a different approach - to determine the optimal structure of a donation, i.e. its optimal composition. Hence, the problem no longer lies in attempting to figure out whether a donation in kind is either more or less efficient than a donation in cash, but rather, to determine, through various hypotheses relative to the agent's behaviour, the most preferable structure for the donor.