Jakiela, PamelaOzier, Owen2012-06-292012-06-292012-06https://hdl.handle.net/10986/9337This paper measures the economic impact of social pressure to share income with kin and neighbors in rural Kenyan villages. The authors conduct a lab experiment in which they randomly vary the observability of investment returns. The goal is to test whether subjects reduce their income in order to keep it hidden. The analysis finds that women adopt an investment strategy that conceals the size of their initial endowment in the experiment, although that strategy reduces their expected earnings. This effect is largest among women with relatives attending the experiment. Parameter estimates suggest that women behave as though they expect to be pressured to share four percent of their observable income with others, and substantially more when close kin can observe income directly. Although this paper provides experimental evidence from a single African country, observational studies suggest that similar pressure from kin may be prevalent in many rural areas throughout Sub-Saharan Africa.CC BY 3.0 IGOACCOUNTINGAFFILIATED ORGANIZATIONSASSET HOLDINGSBANK OPERATIONSBARGAININGBORROWINGCREDIT ASSOCIATIONSCREDIT COOPERATIVESDECISION MAKINGDECLINE IN INVESTMENTDEMOGRAPHICDEVELOPING ECONOMIESDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDRIVERSDURABLEDURABLE ASSETDURABLE ASSETSECONOMIC DEVELOPMENTECONOMIC GROWTHEMPLOYMENTEXCHANGE RATEEXPECTED UTILITYEXPERIMENTAL ECONOMICSHOUSEHOLD BARGAININGHOUSEHOLD WEALTHHUMAN DEVELOPMENTINCENTIVE EFFECTSINCOMEINCOMESINSURANCEINSURANCE MARKETSINTERNATIONAL BANKINVESTINGINVESTMENT AMOUNTINVESTMENT CHOICEINVESTMENT CHOICESINVESTMENT DECISIONINVESTMENT DECISIONSINVESTMENT INCENTIVESINVESTMENT INCOMEINVESTMENT OPPORTUNITIESINVESTMENT OPTIONINVESTMENT OPTIONSINVESTMENT RETURNINVESTMENT RETURNSINVESTMENT STRATEGYLEVEL OF RISKLEVYLIQUIDITYLOANLOTTERIESMARGINAL UTILITYMAXIMUM LIKELIHOOD ESTIMATIONMICRO ENTERPRISEMICROENTERPRISESMUTUAL INSURANCEOCCUPATIONSOPTIMAL ALLOCATIONOPTIMAL INVESTMENTOPTIMIZATIONPARTICIPATION CONSTRAINTSPAYOUTPERMANENT INCOMEPRODUCTIVE INVESTMENTSPROFITABILITYRESOURCE ALLOCATIONRISK AVERSERISK AVERSE INDIVIDUALSRISK AVERSIONRISK POOLINGRISK PREFERENCERISK PREFERENCESRISKY INVESTMENTRISKY INVESTMENTSRISKY SECURITYSANCTIONSANCTIONSSAVINGSSAVINGS ACCOUNTSAVINGS ACCOUNTSSELF­HELPSOCIAL CAPITALSOCIAL NETWORKSTAXTAX RATETAX RATESTAXATIONUNSKILLED LABORUTILITY FUNCTIONUTILITY FUNCTIONSUTILITY MAXIMIZATIONUTILITY THEORYWAGESWEALTHWorld Bank10.1596/1813-9450-6085