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Inter-household Allocations within Extended Family: Evidence from the Indonesia Family Life Survey

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Author Info
Firman Witoelar () (Economic Growth Center, Yale University)
Abstract

This paper uses data from two waves of the Indonesia Family life Survey (IFLS2-1997 and IFLS3-2000) to investigate whether households that belong to the same extended families pool their income to smooth their consumption. We exploit the fact that the survey also tracks and interviews split-off households during the follow-up surveys, enabling us to construct a panel of extended families. The findings suggest that in contradiction to the null hypothesis of extended-family income pooling, household own income still matters to household consumption even after controlling for extended family resources. The result stands after correcting for potential measurement error and endogeneity of income. More importantly, the findings also suggest that although the change in household own income matters to the change in household consumption, controlling for extended family resources, the magnitudes of the coefficients are small. We also find evidence that household consumption is affected by characteristics of other households in the same extended family.

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Paper provided by Economic Growth Center, Yale University in its series Working Papers with number 912.

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Length: 46 pages
Date of creation: May 2005
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Handle: RePEc:egc:wpaper:912

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Related research
Keywords: Consumption smoothing; risk-sharing; extended families;

Find related papers by JEL classification:
D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Beegle, Kathleen & De Weerdt, Joachim & Dercon, Stefan, 2006. "Adult mortality and consumption growth in the age of HIV/AIDS," Policy Research Working Paper Series 4082, The World Bank. [Downloadable!]
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