EconTalk Don Cox on the Economics of Inheritance
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May 4, 2006 Don Cox, an economics professor at Boston College, discusses the economics of inheritance, how parents allocate their time and money among their children, changes in inheritance practices in Tanzania, potential conflicts in dividing inheritance, dynamics of family relationships and inheritance distribution, and the biological purpose of adolescence.
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The Equal Division Puzzle
- Most families divide estates equally, even when one child is wealthier.
- This contradicts altruistic models, which suggest favoring the less successful child.
Primogeniture vs. Equal Division
- Historically, primogeniture dictated inheritance, especially in agrarian societies.
- Modern American families tend to divide assets equally due to liquid assets.
Tanzanian Inheritance Conflict
- In Tanzania, new farming technology shifted inheritance to favor the eldest son.
- This led to increased family conflict, as younger sons felt disinherited.