Does Africa Need a Rotten Kin Theorem? Experimental Evidence From Village Economies 2009 (Kenya)

Abstract

The survey data accompanies the paper, "Does Africa Need a Rotten Kin Theorem? Experimental Evidence From Village Economies," published in the Review of Economic Studies, (2016) 83 (1): 231-268. The paper measures the economic impacts of social pressures to share income with relatives and neighbors in rural African villages within a controlled laboratory environment. The researchers conduct a lab experiment in which they randomly vary the observability of positive income shocks resulting from risky investments. In some treatments, they allow participants to pay a price to avoid announcing anything about their income in the game. They vary the price offered to participants, and find that 28 percent of participants choose to pay to avoid the announcement, at a price that is on average 16 percent of their gross earnings in the game. Further, the researchers find that 10 percent of women forced to announce a portion of their income shock adopt an investment strategy that conceals the size of their initial endowment in the experiment, though that strategy reduces their expected earnings. Both findings are suggestive of the economic drag that social pressures may create on investment in SubSaharan Africa.