Risk Tolerance, Self-Interest, and Social Preferences

We use an experimental method to investigate whether systematic relationships exist across distinct aspects of individual preferences: risk aversion in monetary outcomes, altruism in a twoperson context, and social preferences in a larger group context. Individual preferences across these three contexts are measured, and there is no possibility for risk sharing, wealth effects, or updating expectations of the population choices. We find that social preferences are related to demographic variables, including years of education, gender, and age. Perhaps most importantly, self allocation in a two-person dictator game is related to social preferences in a group context. Participants who are more generous in a dictator game are more likely to vote against their selfinterest in a group decision-making task which we interpret to be expressions of social preferences

Labor Supply Effects of Winning a Lottery

This paper investigates how winning a substantial lottery prize affects labor supply. Analyzing data from Dutch State Lottery winners, we find that earnings are affected but not employment. Lottery prize winners reduce their hours of work but they are not very likely to withdraw from the labor force. We also find that the effects of lottery prizes last for several years and materialize predominantly among young single individuals without children

When you need it or when I die? Timing of monetary transfers from parents to children

This paper investigates the timing of wealth transfers between generations. We develop an overlapping generations model in which each generation can borrow against its future income but not against expected bequest. As a result, generations relatively poorer than their parents may end up not smoothing consumption. We prove that if wealth transfers can take place earlier in life, then each generation smooths consumption despite the constraint on borrowing and the first best solution is restored. The model implies that parents transfer resources when the children are credit constrained. This implication is tested using Dutch survey data on households' intentions to make intervivos transfers matched with administrative data that allow to construct a measure of the probability of being in need of a transfer. All in all, the paper highlights the importance of intervivos transfers as a device that households can resort to in order to mitigate inter--generational wealth inequalities

Leaving a legacy: Bequest giving in Australia

This article considers what drives donors to leave charitable bequests. Building on theories of charitable bequest giving, we consider two types of motivations for leaving a bequest: attitudinal and structural motivations. Using unique Australian data, we show that a strong belief in the efficacy of charitable organisations has a significant positive effect on the likelihood of leaving a bequest, as does past giving behaviour and having no children. As bequests constitute an important income stream for charitable organisations, this research can help fundraisers better target their marketing strategies towards those most likely to plan their estates and motivate these people to make bequests