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Is Ignorance Bliss? The Effect of Asymmetric Information between Spouses on Intra-household Allocations

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  • Carolina Castilla
  • Thomas Walker

Abstract

We conducted a field experiment in Southern Ghana to test the effect of asymmetric information on intrahousehold allocation. A lottery was conducted, where prizes were distributed in public and in private. The results indicate that asymmetric information over windfalls has a differential effect on observable and concealable expenses, consistent with hiding. Husbands' public windfalls increase investment in assets and social capital, while there is no such effect when wives win. Private windfalls of both spouses are committed to cash (wives) or in-kind gifts (husband) which are either difficult to monitor or to reverse if discovered by the other spouse.

Suggested Citation

  • Carolina Castilla & Thomas Walker, 2013. "Is Ignorance Bliss? The Effect of Asymmetric Information between Spouses on Intra-household Allocations," American Economic Review, American Economic Association, vol. 103(3), pages 263-268, May.
    • Handle: RePEc:aea:aecrev:v:103:y:2013:i:3:p:263-68
    Note: DOI: 10.1257/aer.103.3.263
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    References listed on IDEAS

    as
    1. Udry, Christopher, 1996. "Gender, Agricultural Production, and the Theory of the Household," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 1010-1046, October.
    2. Joyce J. Chen, 2006. "Migration and Imperfect Monitoring: Implications for Intra-Household Allocation," American Economic Review, American Economic Association, vol. 96(2), pages 227-231, May.
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    More about this item

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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