On the basis of the LSMS, I construct a vector of individual and household characteristics which could have an effect on the supply of volunteer labor. These include the demographic composition of the household, age, gender, marital status, education level, ethnicity, and whether or not the respondent was born in his current place of residence. One shortcoming of these data is that it is virtually impossible to disentangle the wage and non-wage components of income because a very large fraction of individuals in the rural sample in the survey are farmers, often working on their own plots of land. A second problem of the data relates to the absence of community measures. The community questionnaire in the 1994 LSMS was not consistently applied in the same communities as the household questionnaire, while the number of households sampled withinl a given cluster (between 4 and 13) is arguably too small to construct survey-based estimates of measures of ethnic and income dispersion within a cluster.

I use a measure of the expenditures made by the Peruvian Social Fund, FONCODES, in the twelve months before the survey as a partial control for the effect of public expenditures on volunteering. FONCODES finances small-scale infrastructure projects throughout the country, especially in rural areas. Although there is no comprehensive, disaggregated data on public expenditures in Peru, FONCODES is probably the largest single source of funding for the kinds of projects which could affect volunteering in the rural areas of Peru.<sup>8</sup> FONCODES keeps records of monthly expenditures at the district level. Districts are the smallest political unit in Peru, and the sample of rural households drawn for the LSMS includes observations from 103 of Peru's 1812 districts.

supported by a growing body of experimental research (Palfrey and Prisbey, 1997; Kahneman and Knetsch, 1992). This essentially takes us back to the "charity" framework. Alternatively, given the wide variety of activities which fall under the general rubric of volunteering in rural Peru (see Table 2 below), one could assume that differences in direct benefits from the local public goods produced with volunteer labor wash out: one household with many children benefits most from the construction of an additional classroom, while another household with a plot of land near the river benefits most from repairs to an irrigation ditch but, in the aggregate, benefits are roughly constant across households. In this case, benefits are an omitted variable from the volunteering equation, but they are not systematically correlated with household characteristics and should therefore not bias the estimated coefficients.

r A World Bank study on the programs of the Ministry of the Presidency, the Ministry charged specifically with poverty alleviation in Peru, shows that FONCODES' budget was almost 15 times the size of that of COOPOP, the only other program in the Ministry which executed comparable small-scale infrastructure programs in rural areas (World Bank, 1996, p. 22). Data from the Ministry of Economy and Finance, meanwhile, suggest that FONCODES' budget was about eight times the size of the budget of the Rural Roads program of the Ministry of Transportation, and ten times the size of the PRONAMACHS program of the Ministry of Agriculture (Sierra and O' Brien, 1994, p. 13). Peru is an extremely centralized country, and expenditures by local governments on rural infrastructure are generally very small (World Bank, 1995b, pp. 25-37).

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