Template-type: ReDif-Paper 1.0 
Author-Name: Waidler, Jennifer
Author-Email: waidler@merit.unu.edu
Author-workplace-name: UNU-MERIT
Title: On the fungibility of public and private transfers: A mental accounting approach
Abstract: A common assumption in economics is that money is fungible. In other 
	 words, spending patterns do not depend on the source of income, only on 
	 the total amount. The mental accounting theory, however, rejects this 
	 assumption by arguing that people compartmentalise their income into 
	 different mental accounts and decide on their consumption within each of 
	 these accounts. In this paper I hypothesise that households differently 
	 associate a private transfer coming from a migrant than a public 
	 transfer received from the government, and that this impacts the way 
	 transfers are spent. By analysing the first nationally representative 
	 longitudinal survey in South Africa, covering the years 2008, 2010 and 
	 2012, I find evidence that public and private transfers are not spent in 
	 the same way. 
Keywords: Fungibility, Mental Accounting, Remittances, Social transfers, South Africa
Classification-JEL: D1, D12, F24, J18, I38, E21
Series: UNU-MERIT Working Papers
Creation-Date: 20161026
Number: 2016-060
File-URL: https://unu-merit.nl/publications/wppdf/2016/wp2016-060.pdf
File-Format: application/pdf
File-Size: 275 kb
Handle: RePEc:unm:unumer:2016060