We provide a direct test of the impact of altruism on remittances. From a sample of Indian migrant workers in Qatar, we elicit the propensity to share with others from their responses in a dictator game and use it as a proxy for altruism. For the entire sample, we find that altruism does not seem to matter. However, we document a strong positive relationship between altruism and remittances for a subset of migrants with a loan obligation, whereas indirect tests of altruism, typically used in the literature, would fail to establish this relationship. We explain the role of loan obligations with a standard remittance model extended with reference-dependent preferences.
ASJC Scopus subject areas
- Economics and Econometrics