FOR LOVE OR REWARD? Experimental evidence on the economics of gift-giving to parents by their adult children
Gifts to elderly parents from their adult children are often motivated by the latter''s expectations of what they may receive in return. That is the central finding of an experimental economic study by Professors Maria Porter and Abi Adams, which is forthcoming in the Economic Journal.
Their evidence on the motivation behind gift‐giving provides more than simply a window into the human psyche. The research also yields valuable insights for the design of pension systems and old age care, which often depends on how family dynamics interact with policy measures. For example, if adult children are motivated more by selfishness than by love, increasing the generosity of government programmes for the elderly will not necessarily ''crowd out'' money that parents receive from their offspring.
Further, with the gift‐giving season fast approaching, it''s a good time to step back and ask questions such as: what motivates gift‐giving habits? Why do adult children give to their parents? Is it simply because they love them and are concerned for their wellbeing? Or are gifts given with the expectation of something in return?