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Title:Family networks and income hiding: evidence from lab-in-the field experiments in rural Liberia
Authors:Beekman, GonneISNI
Gatto, Marcel
Nillesen, Eleonora
Periodical:Journal of African Economies (ISSN 0963-8024)
Geographic term:Liberia
External link:http://jae.oxfordjournals.org/content/24/3/453.abstract
Abstract:This study investigates the relationship between family network density and income hiding in rural Liberia. The authors link people's behaviour in a modified lottery experiment and a time preference game to detailed information about their family networks. They find that individuals with a dense family network are more likely to pay a fraction of their endowment to hide their earnings from the experiment. This association is mainly driven by male respondents. They also find that men with dense family networks have lower discount rates than those with smaller networks. Qualitative responses suggest that these men perceive the authors as an alternative bank: if they have no immediate purpose for the money, they prefer the research team to keep it for two weeks. This prevents them from spending it on things other than its intended use and may keep predatory members of the family network at bay. The negative association between family network density and investment decisions is stronger if these networks are characterised by members who sought financial support in the past. Taken together, the results offer tentative evidence that dense family networks, under some conditions, have adverse impacts on economic decision-making. Bibliogr., notes, ref., sum. [Journal abstract]