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Disagreement in Partners’ Reports of Financial Difficulty

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Author Info
Robert Breunig ()
Deborah Cobb-Clark ()
Xiaodong Gong ()
Danielle Venn

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Abstract

We use unique data in which both partners report about household finances to demonstrate that there is often disagreement about whether the household has experienced financial difficulty in the past year. Four alternative explanations for this disagreement are tested using the data. The results indicate that disagreement may be related to the severity of the underlying material hardship rather than to gender differences or individual (as opposed to household) views of financial difficulty. We find only weak evidence that information asymmetries explain couple disagreement about financial difficulty. This implies that standard surveys which collect information about the household’s financial position from a representative individual may fail to completely characterize the nature of material hardship.

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Publisher Info
Paper provided by Centre for Economic Policy Research, Research School of Social Sciences, Australian National University in its series CEPR Discussion Papers with number 520.

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Length: 21 pages
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:auu:dpaper:520

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Related research
Keywords: Household Finances; Survey Methodology; Material Hardship;

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Find related papers by JEL classification:
C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
D14 - Microeconomics - - Household Behavior - - - Personal Finance
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare

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  1. Pahl, Jan, 1995. "His money, her money: Recent research on financial organisation in marriage," Journal of Economic Psychology, Elsevier, vol. 16(3), pages 361-376, September. [Downloadable!] (restricted)
  2. Ted Bergstrom, 1995. "A Survey of Theories of the Family," Papers _027, University of Michigan, Department of Economics. [Downloadable!]
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  3. Plug, Erik J. S. & Van Praag, Bernard M. S., 1998. "Similarity in response behavior between household members: An application to income evaluation," Journal of Economic Psychology, Elsevier, vol. 19(4), pages 497-513, August. [Downloadable!] (restricted)
  4. Mark Wooden & Simon Freidin & Nicole Watson, 2002. "The Household, Income and Labour Dynamics in Australia (HILDA)Survey: Wave 1," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(3), pages 339-348. [Downloadable!] (restricted)
  5. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-33, March. [Downloadable!] (restricted)
  6. Gianni La Cava & John Simon, 2003. "A Tale of Two Surveys: Household Debt and Financial Constraints in Australia," RBA Research Discussion Papers rdp2003-08, Reserve Bank of Australia. [Downloadable!]
  7. Zagorsky, Jay L., 2003. "Husbands' and wives' view of the family finances," The Journal of Socio-Economics, Elsevier, vol. 32(2), pages 127-146, May. [Downloadable!] (restricted)
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