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The family under the microscope: an experiment testing economic models of household choice

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  • Munro, Alistair
  • Bateman, Ian J.
  • McNally, Tara

Abstract

We devise and execute three experiments to test key features of models of household decision-making. Using established couples (married and unmarried) we test income pooling, unanimity and Pareto efficiency. Subjects make choices individually and jointly and are asked to make predictions about their partner’s choices. Unanimity is rejected. Income pooling is not rejected in joint choice but has less explanatory power in individual choice. In direct tests both sexes do not pool income completely, but in econometric tests across all tasks, women place an equal weight on payoffs but men discount their partner’s payoffs by between 15 and 20%. We find that transparency has little impact on deviations from income pooling or indeed on behaviour generally. Many joint choices deviate from the Pareto principle in a systematic manner suggesting that choices made as a couple are more risk averse than individual decisions.

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  • Munro, Alistair & Bateman, Ian J. & McNally, Tara, 2008. "The family under the microscope: an experiment testing economic models of household choice," MPRA Paper 8974, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:8974
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    Cited by:

    1. André Palma & Nathalie Picard & Anthony Ziegelmeyer, 2011. "Individual and couple decision behavior under risk: evidence on the dynamics of power balance," Theory and Decision, Springer, vol. 70(1), pages 45-64, January.
    2. Carlsson, Fredrik & Martinsson, Peter & Qin, Ping & Sutter, Matthias, 2009. "Household decision making and the influence of spouses’ income, education, and communist party membership: A field experiment in rural China," Working Papers in Economics 356, University of Gothenburg, Department of Economics.
    3. Munro, Alistair & Kebede, Bereket & Tarazona-Gomez, Marcela & Verschoor, Arjan, 2014. "Autonomy and efficiency. An experiment on household decisions in two regions of India," Journal of the Japanese and International Economies, Elsevier, vol. 33(C), pages 114-133.
    4. François Cochard & Hélène Couprie & Astrid Hopfensitz, 2016. "Do spouses cooperate? An experimental investigation," Review of Economics of the Household, Springer, vol. 14(1), pages 1-26, March.
    5. Farah Said, 2016. "Access to Finance and Agency: An Overview of the Constraints to Female-Run Enterprises," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 331-349, September.
    6. Castilla, Carolina, 2019. "What's yours is mine, and what's mine is mine: Field experiment on income concealing between spouses in India," Journal of Development Economics, Elsevier, vol. 137(C), pages 125-140.
    7. Holden, Stein & Bezu, Sosina, 2014. "Are Wives less Selfish than their Husbands? Evidence from Hawk-Dove Game Field Experiments," CLTS Working Papers 3/14, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 10 Oct 2019.
    8. Hélène Couprie & Miriam Beblo & Denis Beninger & François Cochard & Astrid Hopfensitz, 2012. "Equality-Efficiency Trade-off within French and German Couples – A Comparative Experimental Study," THEMA Working Papers 2012-44, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    9. Iversen, Vegard & Jackson, Cecile & Kebede, Bereket & Munro, Alistair & Verschoor, Arjan, 2011. "Do Spouses Realise Cooperative Gains? Experimental Evidence from Rural Uganda," World Development, Elsevier, vol. 39(4), pages 569-578, April.
    10. Carlsson, Fredrik & He, Haoran & Martinsson, Peter & Qin, Ping & Sutter, Matthias, 2012. "Household decision making in rural China: Using experiments to estimate the influences of spouses," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 525-536.
    11. Bereket Kebede & Marcela Tarazona & Alistair Munro & Arjan Verschoor, 2014. "Intra-household Efficiency: An Experimental Study from Ethiopia," Journal of African Economies, Centre for the Study of African Economies, vol. 23(1), pages 105-150.
    12. Fafchamps, Marcel & Said, Farah & d Adda, Giovanna, 2016. "Gender and Agency within the Household: Experimental Evidence from Pakistan," CEPR Discussion Papers 11464, C.E.P.R. Discussion Papers.
    13. Dasgupta, Utteeyo & Mani, Subha, 2015. "Only Mine or All Ours: Do Stronger Entitlements Affect Altruistic Choices in the Household," World Development, Elsevier, vol. 67(C), pages 363-375.
    14. Alistair Munro & Bereket Kebede & Marcela Tarazona-Gomez & Arjan Verschoor, 2013. "Autonomy and Efficiency: An Experiment on Household Decisions in Two Regions of India," NBER Chapters, in: Experiments for Development: Achievements and New Directions, National Bureau of Economic Research, Inc.
    15. Maligalig, Rio L. & Demont, Matty & Umberger, Wendy J. & Peralta, Alexandra, 2017. "Intrahousehold decision making on rice varietal trait improvements: Using experiments to estimate gender influence," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258522, Agricultural and Applied Economics Association.
    16. Alistair Munro, 2018. "Intra†Household Experiments: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 134-175, February.
    17. Miriam Beblo & Denis Beninger, 2017. "Do husbands and wives pool their incomes? A couple experiment," Review of Economics of the Household, Springer, vol. 15(3), pages 779-805, September.
    18. Bereket Kebede & Marcela Tarazona & Alistair Munro & Arjan Verschoor, 2014. "Intra-household Efficiency: An Experimental Study from Ethiopia," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 23(1), pages 105-150.
    19. Miriam Beblo & Denis Beninger, 2012. "Do husbands and wives pool their incomes? Experimental evidence," Working Papers of BETA 2012-10, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    20. Klaus Abbink & Asadul Islam & Chau Nguyen, 2016. "Whose voice matters? An experimental examination of women empowerment in microfinance," Monash Economics Working Papers 40-16, Monash University, Department of Economics.

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    More about this item

    Keywords

    experiment; household; unitary; income pooling; Pareto; family;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D1 - Microeconomics - - Household Behavior

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