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Intra-household Efficiency: An Experimental Study from Ethiopia

Author

Listed:
  • Bereket Kebede
  • Marcela Tarazona
  • Alistair Munro
  • Arjan Verschoor

Abstract

A common feature of many intra-household models is the assumption of efficiency. This paper uses an experimental design to directly test this. Data from 1,200 married couples in Ethiopia were collected using treatments that vary initial endowments of spouses, final allocation rules and information in a voluntary contribution mechanism (VCM). Efficiency is decisively rejected in all treatments. Information improves efficiency only in some treatments, suggesting that the role of information is context dependent. Husbands' expectations of their wives' contributions are higher than their wives' actual contributions, and wives' expectations of their husbands' contributions are lower than their husbands' actual contributions. These systematic errors in expected and actual behaviour imply that the attainment of equilibrium as in a game theoretic framework is unlikely. Statistical tests indicate that instead of efficiency, other considerations are likely important. Overall, most of the empirical results cast doubt on models of the household that assume Pareto efficiency.

Suggested Citation

  • 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.
  • Handle: RePEc:oup:jafrec:v:23:y:2014:i:1:p:105-150.
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    File URL: http://hdl.handle.net/10.1093/jae/ejt019
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    Cited by:

    1. Alistair Munro, 2014. "Hide and Seek: A Theory of Efficient Income Hiding within the Household," GRIPS Discussion Papers 14-17, National Graduate Institute for Policy Studies.
    2. Mohammed Abdellaoui & Olivier l’Haridon & Corina Paraschiv, 2013. "Individual vs. couple behavior: an experimental investigation of risk preferences," Theory and Decision, Springer, vol. 75(2), pages 175-191, August.
    3. 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.
    4. repec:eee:jjieco:v:33:y:2014:i:c:p:114-133 is not listed on IDEAS
    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. Bezu, Sosina & Holden, Stein T., 2015. "Generosity and sharing among villagers: Do women give more?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 103-111.
    7. Ringdal, Charlotte & Sjursen, Ingrid Hoem, 2017. "Household bargaining and spending on children: Experimental evidence from Tanzania," Discussion Paper Series in Economics 19/2017, Norwegian School of Economics, Department of Economics.
    8. 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.
    9. Holden, Stein & Bezu, Sosina, 2013. "Joint Land Certification and Intra-household Decision-making:Towards Empowerment of Wives?," CLTS Working Papers 14/13, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
    10. Hoel, Jessica B., 2015. "Heterogeneous households: A within-subject test of asymmetric information between spouses in Kenya," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 123-135.
    11. Charlotte Ringdal & Hoem Sjursen, 2017. "Household bargaining and spending on children: Experimental evidence from Tanzania," WIDER Working Paper Series 128, World Institute for Development Economic Research (UNU-WIDER).
    12. Arjan Verschoor & Bereket Kebede & Alistair Munro & Marcela Tarazona, 2017. "Spousal Control and Efficiency of Intra-Household Decision Making: Experiments among Married Couples in India, Ethiopia and Nigeria," GRIPS Discussion Papers 16-31, National Graduate Institute for Policy Studies.
    13. Anderson, C. Leigh & Reynolds, Travis W. & Gugerty, Mary Kay, 2017. "Husband and Wife Perspectives on Farm Household Decision-making Authority and Evidence on Intra-household Accord in Rural Tanzania," World Development, Elsevier, vol. 90(C), pages 169-183.
    14. Michele Tertilt & Matthias Doepke, 2015. "Asymmetric Information in Couples," 2015 Meeting Papers 606, Society for Economic Dynamics.
    15. Alistair Munro & Danail Popov, 2013. "A portmanteau experiment on the relevance of individual decision anomalies for households," Experimental Economics, Springer;Economic Science Association, vol. 16(3), pages 335-348, September.
    16. repec:eee:wdevel:v:102:y:2018:i:c:p:18-29 is not listed on IDEAS
    17. Holden, Stein & Bezu, Sosina, 2014. "Joint Land Certification, Gendered Preferences, and Land-related Decisions: Are Wives Getting More Involved?," CLTS Working Papers 6/14, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
    18. Afzal, Uzma & d Adda, Giovanna & Fafchamps, Marcel & Said, Farah, 2016. "Gender and Agency within the Household: Experimental Evidence from Pakistan," CEPR Discussion Papers 11464, C.E.P.R. Discussion Papers.
    19. Alistair Munro & Bereket Kebede & Marcela Tarazona-Gomez & Arjan Verschoor, 2011. "Autonomy or efficiency: An experiment on household decisions in two regions of India," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 11-02, School of Economics, University of East Anglia, Norwich, UK..
    20. Hoel, Jessica B. & Hidrobo, Melissa & Bernard, Tanguy & Ashour, Maha, 2017. "Productive inefficiency in dairy farming and cooperation between spouses: Evidence from Senegal:," IFPRI discussion papers 1698, International Food Policy Research Institute (IFPRI).
    21. Sarah Reynolds, 2015. "Behavioral games and intrahousehold allocation: teenage mothers and their mothers in Brazil," Review of Economics of the Household, Springer, vol. 13(4), pages 901-927, December.
    22. repec:eee:jeborg:v:148:y:2018:i:c:p:241-259 is not listed on IDEAS
    23. Nathan Fiala, 2017. "Business is Tough, but Family is Worse: Household Bargaining and Investment in Microenterprises in Uganda," Working papers 2017-05, University of Connecticut, Department of Economics.

    More about this item

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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