Altruism and participation costs in local redistribution

Abstract

2015),"Does altruism matter on online group buying? Perspectives from egotistic and altruistic motivation", Information Technology & People, Vol. 28 Iss 3 pp. 677-698 http://dx.If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to investigate the role played by the geographic distance between the poor and non-poor in the local demand for income redistribution and, in particular, to provide an empirical test of the geographically limited altruism model proposed by Pauly, incorporating the possibility of participation costs associated with the provision of transfers. Design/methodology/approach -First, the authors motivate the discussion by allowing for an "iceberg cost" as participation for the poor individuals in Pauly's original model. Next, using data from the 2000 Brazilian Census and a panel based on the National Household Sample Survey (PNAD) from 2001 to 2007, the authors estimate the effect of the proximity between poor and non-poor on the demand for redistribution. Findings -All of the authors' distance-related explanatory variables indicate that an increased proximity between poor and non-poor is associated with better targeting of the programs (demand for redistribution). For instance, a one-hour increase in the time spent commuting by the poor reduces the targeting by 3.158 percentage points. This result is similar to that of Ashworth et al., but is definitely not due to the program leakages. To empirically disentangle participation costs and spatially restricted altruism effects, an additional test is conducted using unique panel data based on the 2004 and 2006 PNAD, which assess the number of benefits and the average benefit value received by beneficiaries. The estimates suggest that both cost and altruism play important roles in the demand for redistribution and might reduce targeting in Brazil. Lastly, the results indicate that "size matters"; i.e. the budget for redistribution has a positive impact on targeting. Practical implications -Our results suggest that a totally centralized supply of transfers may be more inefficient than local redistribution in terms of targeting, either due to higher participation costs or because of the eventual greater geographical distance ...