Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies

This paper measures the economic impact of social pressure to share income with kin and neighbors in rural Kenyan villages. The authors conduct a lab experiment in which they randomly vary the observability of investment returns. The goal is to test whether subjects reduce their income in order to k...

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Main Authors: Jakiela, Pamela, Ozier, Owen
Format: Policy Research Working Paper
Language:English
Published: World Bank, Washington, DC 2012
Subjects:
Online Access:http://documents.worldbank.org/curated/en/2012/06/16358327/africa-need-rotten-kin-theorem-experimental-evidence-village-economies
http://hdl.handle.net/10986/9337
id okr-10986-9337
recordtype oai_dc
spelling okr-10986-93372021-04-23T14:02:45Z Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies Jakiela, Pamela Ozier, Owen ACCOUNTING AFFILIATED ORGANIZATIONS ASSET HOLDINGS BANK OPERATIONS BARGAINING BORROWING CREDIT ASSOCIATIONS CREDIT COOPERATIVES DECISION MAKING DECLINE IN INVESTMENT DEMOGRAPHIC DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DRIVERS DURABLE DURABLE ASSET DURABLE ASSETS ECONOMIC DEVELOPMENT ECONOMIC GROWTH EMPLOYMENT EXCHANGE RATE EXPECTED UTILITY EXPERIMENTAL ECONOMICS HOUSEHOLD BARGAINING HOUSEHOLD WEALTH HUMAN DEVELOPMENT INCENTIVE EFFECTS INCOME INCOMES INSURANCE INSURANCE MARKETS INTERNATIONAL BANK INVESTING INVESTMENT AMOUNT INVESTMENT CHOICE INVESTMENT CHOICES INVESTMENT DECISION INVESTMENT DECISIONS INVESTMENT INCENTIVES INVESTMENT INCOME INVESTMENT OPPORTUNITIES INVESTMENT OPTION INVESTMENT OPTIONS INVESTMENT RETURN INVESTMENT RETURNS INVESTMENT STRATEGY LEVEL OF RISK LEVY LIQUIDITY LOAN LOTTERIES MARGINAL UTILITY MAXIMUM LIKELIHOOD ESTIMATION MICRO ENTERPRISE MICROENTERPRISES MUTUAL INSURANCE OCCUPATIONS OPTIMAL ALLOCATION OPTIMAL INVESTMENT OPTIMIZATION PARTICIPATION CONSTRAINTS PAYOUT PERMANENT INCOME PRODUCTIVE INVESTMENTS PROFITABILITY RESOURCE ALLOCATION RISK AVERSE RISK AVERSE INDIVIDUALS RISK AVERSION RISK POOLING RISK PREFERENCE RISK PREFERENCES RISKY INVESTMENT RISKY INVESTMENTS RISKY SECURITY SANCTION SANCTIONS SAVINGS SAVINGS ACCOUNT SAVINGS ACCOUNTS SELF­HELP SOCIAL CAPITAL SOCIAL NETWORKS TAX TAX RATE TAX RATES TAXATION UNSKILLED LABOR UTILITY FUNCTION UTILITY FUNCTIONS UTILITY MAXIMIZATION UTILITY THEORY WAGES WEALTH This paper measures the economic impact of social pressure to share income with kin and neighbors in rural Kenyan villages. The authors conduct a lab experiment in which they randomly vary the observability of investment returns. The goal is to test whether subjects reduce their income in order to keep it hidden. The analysis finds that women adopt an investment strategy that conceals the size of their initial endowment in the experiment, although that strategy reduces their expected earnings. This effect is largest among women with relatives attending the experiment. Parameter estimates suggest that women behave as though they expect to be pressured to share four percent of their observable income with others, and substantially more when close kin can observe income directly. Although this paper provides experimental evidence from a single African country, observational studies suggest that similar pressure from kin may be prevalent in many rural areas throughout Sub-Saharan Africa. 2012-06-29T20:50:35Z 2012-06-29T20:50:35Z 2012-06 http://documents.worldbank.org/curated/en/2012/06/16358327/africa-need-rotten-kin-theorem-experimental-evidence-village-economies http://hdl.handle.net/10986/9337 English Policy Research Working Paper; No. 6085 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ACCOUNTING
AFFILIATED ORGANIZATIONS
ASSET HOLDINGS
BANK OPERATIONS
BARGAINING
BORROWING
CREDIT ASSOCIATIONS
CREDIT COOPERATIVES
DECISION MAKING
DECLINE IN INVESTMENT
DEMOGRAPHIC
DEVELOPING ECONOMIES
DEVELOPMENT ECONOMICS
DEVELOPMENT POLICY
DRIVERS
DURABLE
DURABLE ASSET
DURABLE ASSETS
ECONOMIC DEVELOPMENT
ECONOMIC GROWTH
EMPLOYMENT
EXCHANGE RATE
EXPECTED UTILITY
EXPERIMENTAL ECONOMICS
HOUSEHOLD BARGAINING
HOUSEHOLD WEALTH
HUMAN DEVELOPMENT
INCENTIVE EFFECTS
INCOME
INCOMES
INSURANCE
INSURANCE MARKETS
INTERNATIONAL BANK
INVESTING
INVESTMENT AMOUNT
INVESTMENT CHOICE
INVESTMENT CHOICES
INVESTMENT DECISION
INVESTMENT DECISIONS
INVESTMENT INCENTIVES
INVESTMENT INCOME
INVESTMENT OPPORTUNITIES
INVESTMENT OPTION
INVESTMENT OPTIONS
INVESTMENT RETURN
INVESTMENT RETURNS
INVESTMENT STRATEGY
LEVEL OF RISK
LEVY
LIQUIDITY
LOAN
LOTTERIES
MARGINAL UTILITY
MAXIMUM LIKELIHOOD ESTIMATION
MICRO ENTERPRISE
MICROENTERPRISES
MUTUAL INSURANCE
OCCUPATIONS
OPTIMAL ALLOCATION
OPTIMAL INVESTMENT
OPTIMIZATION
PARTICIPATION CONSTRAINTS
PAYOUT
PERMANENT INCOME
PRODUCTIVE INVESTMENTS
PROFITABILITY
RESOURCE ALLOCATION
RISK AVERSE
RISK AVERSE INDIVIDUALS
RISK AVERSION
RISK POOLING
RISK PREFERENCE
RISK PREFERENCES
RISKY INVESTMENT
RISKY INVESTMENTS
RISKY SECURITY
SANCTION
SANCTIONS
SAVINGS
SAVINGS ACCOUNT
SAVINGS ACCOUNTS
SELF­HELP
SOCIAL CAPITAL
SOCIAL NETWORKS
TAX
TAX RATE
TAX RATES
TAXATION
UNSKILLED LABOR
UTILITY FUNCTION
UTILITY FUNCTIONS
UTILITY MAXIMIZATION
UTILITY THEORY
WAGES
WEALTH
spellingShingle ACCOUNTING
AFFILIATED ORGANIZATIONS
ASSET HOLDINGS
BANK OPERATIONS
BARGAINING
BORROWING
CREDIT ASSOCIATIONS
CREDIT COOPERATIVES
DECISION MAKING
DECLINE IN INVESTMENT
DEMOGRAPHIC
DEVELOPING ECONOMIES
DEVELOPMENT ECONOMICS
DEVELOPMENT POLICY
DRIVERS
DURABLE
DURABLE ASSET
DURABLE ASSETS
ECONOMIC DEVELOPMENT
ECONOMIC GROWTH
EMPLOYMENT
EXCHANGE RATE
EXPECTED UTILITY
EXPERIMENTAL ECONOMICS
HOUSEHOLD BARGAINING
HOUSEHOLD WEALTH
HUMAN DEVELOPMENT
INCENTIVE EFFECTS
INCOME
INCOMES
INSURANCE
INSURANCE MARKETS
INTERNATIONAL BANK
INVESTING
INVESTMENT AMOUNT
INVESTMENT CHOICE
INVESTMENT CHOICES
INVESTMENT DECISION
INVESTMENT DECISIONS
INVESTMENT INCENTIVES
INVESTMENT INCOME
INVESTMENT OPPORTUNITIES
INVESTMENT OPTION
INVESTMENT OPTIONS
INVESTMENT RETURN
INVESTMENT RETURNS
INVESTMENT STRATEGY
LEVEL OF RISK
LEVY
LIQUIDITY
LOAN
LOTTERIES
MARGINAL UTILITY
MAXIMUM LIKELIHOOD ESTIMATION
MICRO ENTERPRISE
MICROENTERPRISES
MUTUAL INSURANCE
OCCUPATIONS
OPTIMAL ALLOCATION
OPTIMAL INVESTMENT
OPTIMIZATION
PARTICIPATION CONSTRAINTS
PAYOUT
PERMANENT INCOME
PRODUCTIVE INVESTMENTS
PROFITABILITY
RESOURCE ALLOCATION
RISK AVERSE
RISK AVERSE INDIVIDUALS
RISK AVERSION
RISK POOLING
RISK PREFERENCE
RISK PREFERENCES
RISKY INVESTMENT
RISKY INVESTMENTS
RISKY SECURITY
SANCTION
SANCTIONS
SAVINGS
SAVINGS ACCOUNT
SAVINGS ACCOUNTS
SELF­HELP
SOCIAL CAPITAL
SOCIAL NETWORKS
TAX
TAX RATE
TAX RATES
TAXATION
UNSKILLED LABOR
UTILITY FUNCTION
UTILITY FUNCTIONS
UTILITY MAXIMIZATION
UTILITY THEORY
WAGES
WEALTH
Jakiela, Pamela
Ozier, Owen
Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies
relation Policy Research Working Paper; No. 6085
description This paper measures the economic impact of social pressure to share income with kin and neighbors in rural Kenyan villages. The authors conduct a lab experiment in which they randomly vary the observability of investment returns. The goal is to test whether subjects reduce their income in order to keep it hidden. The analysis finds that women adopt an investment strategy that conceals the size of their initial endowment in the experiment, although that strategy reduces their expected earnings. This effect is largest among women with relatives attending the experiment. Parameter estimates suggest that women behave as though they expect to be pressured to share four percent of their observable income with others, and substantially more when close kin can observe income directly. Although this paper provides experimental evidence from a single African country, observational studies suggest that similar pressure from kin may be prevalent in many rural areas throughout Sub-Saharan Africa.
format Publications & Research :: Policy Research Working Paper
author Jakiela, Pamela
Ozier, Owen
author_facet Jakiela, Pamela
Ozier, Owen
author_sort Jakiela, Pamela
title Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies
title_short Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies
title_full Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies
title_fullStr Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies
title_full_unstemmed Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies
title_sort does africa need a rotten kin theorem? experimental evidence from village economies
publisher World Bank, Washington, DC
publishDate 2012
url http://documents.worldbank.org/curated/en/2012/06/16358327/africa-need-rotten-kin-theorem-experimental-evidence-village-economies
http://hdl.handle.net/10986/9337
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