What Motivates Transfer of Resources: Altruism or Principle of Exchange?

This paper focuses on the issue of remittances and other non-monetary transfers among individuals. Some of the recent studies gave a new dimension to the understanding of this issue by highlighting the aspect of self-interest and the principle of exchange, which may motivate the act of helping others rather than being guided entirely by altruism. Based on the sample survey in the low-income households of Delhi slums, this study collects evidence to reconfirm this viewpoint. The binomial logit framework used to model decisions of whether or not to remit and/or help others tends to favour the practice of reciprocation in explaining transfers of resources, after controlling for household size, education, duration of migration and contact at the place of origin of the migrants and income (savings). While household size tends to reduce the probability of transfer of monetary resources, other variables seem to raise the possibility of extending both monetary and non-monetary help. Informal networks based on exchange behaviour have important policy implications in the context of urban poverty reduction and slum management, as these informal practices can be used as inputs for designing programmes based on participatory approach, which would be more cost efficient than direct interventions.