1993 Reports

Is the Japanese extended family altruistically linked? A test based on Engel curves

Hayashi, Fumio

Altruism has the well-known neutrality implication that consumption is invariant to division of resources within the family. We test this by estimating Engel curves for Japanese two-generation households. The hypothesis that Engel curves are not affected by division of resources between parent and child can be strongly rejected. The food items whose budget share increases with parent's share of household income are precisely those favored by old generations such as cereal, fish, and vegetables.