Chapter 5 Intergenerational and interhousehold economic links This chapter discusses two theoretical frameworks that economists use to analyze links between households. The first is based on altruistic preferences and the second framework falls under the heading transactions cost approach. Altruistic and non altruistic transfers can link together households most likely households of different generations within the same family line. The relatives may find advantages to engaging in joint production or purchasing services from one another outside of markets. One implication certainly is that not all intra household interactions need involve altruism. A second is that it cannot be assumed that measured monetary flows passing among relatives necessarily constitute transfersas opposed to payments for goods and services or for subsequent repayment with interest. A third is that transactionscost formulations may be most applicable where participant incomes and sums transacted are low. Although this chapter analyzes altruism and exchange separately in practice the two may often accompany one anotherwith altruism reducing enforcement difficulties in interfamily exchanges.