A United Family Prospers: Do Spouse-regarding Preferences Shape Household Production and Income?

• Development Workshop

Date and Location

Monday, September 28, 2015, 4:10 PM - 5:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

Household production builds on the basis of cooperation among family members. However, field evidence on the extent to which variation in intrahousehold relationships accounts for household economic outcomes like income is altogether missing. Here, combining experimental measures of spouse-regarding preferences and household survey data for a sample of rural households in Burkina Faso, I find a great variation in spouses' experimental behaviors, which explains substantial differences in real-world household income: (i) controlling for household-level covariates, households in which at least one member is approximately indifferent between payments to her spouse and to herself, have substantially higher income than those whose members either prefer payments to themselves or strictly prefer payments to their spouses; (ii) women's experimental types provide majority of the explanatory power. Providing suggestive evidence of causality, I argue that the causal relationship is inconsistent with a unitary model, a collective model, or some existing noncooperative models. Instead I develop a noncooperative household production model with commitment failure to reconcile the empirical findings, which predicts intrahousehold productive inefficiency when individual spouses lack willingness to act collectively.