| Abstract: | The economic portion of family life involves the exchange of goods and care. The paper argues that there are four identifiable kinds of utility that can be derived from participating in the extended family. Furthermore, as income increases, the total utility involved in giving care to distant kin falls. However, on the cost side the opportunity cost incurred by giving a gift away probably increases as income increases while the production cost falls. In neo‐classical terms the individual would have an incentive to evade responsibilities to distant kin as soon as his costs exceeded the utility he gained from these arrangements. The kin and the community, however, can and do levy an additional disapprobation cost on evaders; and the magnitude of this cost may well turn out to be critical in determining whether or not the extended family will break down in any community. The assertion that the extended family breaks down as income rises has been questioned on theoretical and empirical grounds. Furthermore, this paper is sceptical about the argument that such a breakdown is desirable from the point of view of economic development. This is because there is no disincentive to work when the participants in an extended family find the arrangement mutually valuable as is the usual case; and because the extended family can be a source of entrepreneurial strength. |
