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Intra-household decisions making on intertemporal choices: An experimental study in rural China

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  • Yang, Xiaojun

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Carlsson, Fredrik

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

In this paper, we conduct a high stake experiment in rural China to investigate the determinants of individual and joint decisions regarding intertemporal choices, and estimate the relative influence of spouses on the joint decisions. We use the Convex Time Budget experimental method to elicit individual and joint decisions on how much money to allocate to an early and a later date. We find that the rates of return have significant effects on the decisions, yet both individual and joint decisions exhibit present-biased time preferences. We also find that both spouses have a significant influence on joint decisions. However, husbands have a stronger influence than wives. Although there are few individual and household characteristics related to the relative influence, we do find a link between relative influence in the experiment and households’ decisions on financial savings in real life. We also find that neither the order of the individual and joint decisions nor the initial control of the endowment in the joint decision affects the behavior in the experiment.

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File URL: http://hdl.handle.net/2077/30274
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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 537.

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Length: 32 pages
Date of creation: 14 Sep 2012
Date of revision:
Handle: RePEc:hhs:gunwpe:0537

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Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Keywords: household decision-making; intertemporal choices; Convex Time Budget; relative influence;

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