Is Informal Redistribution Costly? Evidence from a Lab-in-the-Field Experiment in Senegal

Jul 19, 2026

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In Sub-Saharan Africa, individuals often transfer a substantial share of resources to members of their social networks, fulfilling risk-sharing needs while also reflecting social obligations to redistribute. This paper quantifies the costs of redistributive pressure by eliciting individuals’ willingness to pay (WTP) to hide their income. The evidence implies a social “tax” from informal redistribution of about 10 percent. It also shows participants mainly seek to escape pressure from extended family members rather than all observers.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages7

Reading Time18 min

Introduction

Social pressure and redistribution costs

Experimental Design

Baseline sample and lab sessions

Measuring willingness to pay to hide income

Pub lic Disclosure Authorized Pub lic Disclosure Authorized The World Bank Economic Review, 34(Supplement), 2020, S72–S78 doi: 10.1093/wber/lhz041 Supplementary Article Is Informal Redistribution Costly? Evidence from a Lab-in-the-Field Experiment in Senegal Marie Boltz, Karine Marazyan, and Paola Villar Abstract In Sub-Saharan Africa, individuals frequently transfer a substantial share of their resources to members of their social networks. Social pressure to redistribute, however, can induce disincentive effects on resource allocation decisions. This paper measures and characterizes the costs of redistributive pressure by estimating individuals’willingness to pay (WTP) to hide their income. The study estimates a social tax due to informal redistribution of 10 percent. Moreover, it shows that individuals are willing to escape from the redistributive pressure exerted mainly by extended family members. JEL classification: C91, C93, D13, O12, O15, O17 Keywords: income observability, informal redistribution, extended families, willingness to pay, Lab-in-the-field experiment, Africa 1. Introduction In Sub-Saharan Africa, individuals frequently transfer a substantial share of their resources to members of their social networks (Baland, Guirkinger, and Mali 2011; di Falco and Bulte 2011; Baland et al. 2016) . These transfers can fulfill a risk-sharing role (Cox and Fafchamps 2007) and can also be driven by social motives such as altruism, charity, social prestige, and strong social obligations for redistribution (Platteau 2014) . While transfers motivated by a risk-sharing purpose are potentially reciprocal in nature, transfers motivated by social obligations for redistribution are akin to a tax and may create some inefficiencies. Recent studies have found that social pressure to redistribute can induce direct disincentive effects on resource accumulation decisions, such as labor supply or investment (Grimm, Hartwig, and Lay 2013; Hadness, Vollan, and Kosfeld 2013; Squires 2018), and indirect distortions in resource allocation choices (Baland, Guirkinger, and Mali 2011; di Falco and Bulte 2011; Boltz 2015; Baland et al. 2016; Goldberg 2017) . Marie Boltz is an assistant professor at the Centre d’Économie de la Sorbonne, Université Paris 1; her email address is [marie.boltz@univ-paris1.fr. Karine Marazyan](marie.boltz@univ-paris1.fr. Karine Marazyan) is an assistant professor IEDES-University Paris 1, UMR Développement et Sociétés; her email address [is karine.marazyan@univ-paris1.fr. Paola Villar](is karine.marazyan@univ-paris1.fr. Paola Villar) is a postdoctoral fellow at the University of Namur; her email address [is paola.villar@unamur.be. The](is paola.villar@unamur.be. The) authors are thankful to the CEPREMAP, the PSE Research Fund, the Sarah Andrieux Fund, the Chair G-Mond, the IRD, and the UMR Développement et Sociétés for their financial support for this research project. They particularly would like to thank Jean-Marie Baland, Xavier Gine, Laurent Gobillon, Isabel Günther, Marc Gurgand, Sergei Guriev, Elise Huillery, Kenneth Houngbedji, Pamela Jakiela, Sylvie Lambert, Dan Levin, Karen Macours, Alice Mesnard, Owen Ozier, and numerous conference and seminar participants for their valuable comments. This project received the IRB certification of J-Pal Europe (CE/2014-005) . All remaining errors are ours. © The Author(s) 2019 . Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved. For permissions, please e-mail: [journals.permissions@oup.com](journals.permissions@oup.com) Downloaded from [https://academic.oup.com/wber/article/34/Supplement_1/S72/5650799 by guest on 23 June 2021](https://academic.oup.com/wber/article/34/Supplement_1/S72/5650799 by guest on 23 June 2021) This paper measures and characterizes the costs of redistributive pressure by estimating individuals’willingness to pay (WTP) to hide their i

FAQs

What cost of informal redistribution does the study estimate?

The study estimates that informal redistribution creates a social tax of about 10 percent, based on individuals’ willingness to pay to hide their income.

How does the paper measure willingness to pay to hide income?

It elicits willingness to pay in lab-in-the-field sessions using a multiple-price list method followed by private interview and private lottery.

From whom do individuals most want to escape redistributive pressure?

Individuals are mainly willing to avoid the pressure exerted by extended family members.

Jul 19, 2026

Upload by Ophelia