A common assumption in economics is that money is fungible. In other words,
spending patterns do not depend on the source of income, only on the total amount.
The mental accounting theory, however, rejects this assumption by arguing that
people compartmentalise their income into different mental accounts and decide
on their consumption within each of these accounts. In this paper I hypothesise
that households differently associate a private transfer coming from a migrant than
a public transfer received from the government, and that this impacts the way
transfers are spent. By analysing the first nationally representative longitudinal
survey in South Africa, covering the years 2008, 2010 and 2012, I find evidence that
public and private transfers are not spent in the same way.