Measuring Norms of Income Transfers: Trust Experiments and Survey Data from Vietnam

Abstract

This paper compares the patterns of income transfers within village communities in the north and south of Vietnam by analyzing household survey and experimental data. The results of household data analysis show private transfers flow from high-income households to low-income households in the south where social safety net is limited. In contrast, private transfers do not correlate with pre-transfer income in the north where public transfers are more widespread. In addition, public transfers crowd out private transfers in the north. We conducted a trust game in both regions and found consistent results. People in the south are more altruistic toward the poor: they send more to the poor without expecting higher repayment. This pattern is consistent with the idea that private norms of redistribution from rich to poor are active in the south, but are crowded out in the north, possibly by communist public institutions, although we observe higher levels of trust and reciprocity in the north.