Shaping intergenerational relationships: the demonstration effect

According to the demonstration effect theory, parents make intergenerationa l transfers to their elders in order to elicit a symmetric future behavior from their children. In this paper we show that upstream transfers are expe cted to increase with low returns from alternative financial assets and wit h the donor's life expectancy. The latter effect creates a greater incentiv e for daughters to care for parents. (C) 2000 Elsevier Science S.A. All rig hts reserved. JEL classification: D10; J10.