Parent to children asset transfers

A few words to complement what has been said:
In econ, asset and income are thought of as stock and flow, respectively, and are related through some formula asset=f(future incomes), so I find it sensible to explain any discrepancy between the lhs and rhs by other factors…less so in practice: proxies for the lhs and the rhs are only as good as stock prices and accounting statements, respectively, in reflecting economic value…

In a social context, it would be necessary to know what is included in assets, and income. For example, it has been said that there are relatively few material asset transfers within US families, but what if investment in education is included? In comparison, this isn’t discretionary in many other countries, as it is financed by taxation.

Another example: an increase in national debt can be thought of as a transfer in wealth from juniors to seniors, again complicating the definition of asset transfers.

1 thought on “Parent to children asset transfers

  1. Erwann's note relates to our discussion of Sy Spilerman's work on wealth transfers from parents to children in Israel. We are trying to understand this in the context of "mediating variables": for example, the "treatment" is parents' assets, the "mediator" is income of the adult child, and the "outcome" is the assets of the adult child. Also controlling for some background variables that seem to be "pre-treatment". We've been struggling to understand how to model the "mediation".

    Also, Kobi writes:

    -how are you measuring income? stock (income from interest, income from real estate, income from dividend) vs flow (income from work alone) issues. That probably would to parse effects of treatment (parental assets).

    – you (in the plural or 3.p.s sense) will never even close to model the paths of status (some high dimensional system of pde equations?) transfer. it seems a good place to start (or stand) with the X=parents stuff, Y=kids stuff model b/c that is really what is important. That, I think, is what is *novel* about the study/data you have. Just look at the money; refer to the first point on separating income streams.

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