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Gender Relations and Effect of Credit Availability on Household Expenditure: Evidence from Rural Bangladesh

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  • Anuja Jayaraman
  • Jill L. Findeis

Abstract

To improve the well‐being of individuals, development policies not only have to take into account how resources are allocated within the family or household but also look at the impact of this resource allocation on individuals. The objective of this article is to understand how intrahousehold dynamics (e.g., variations in household bargaining behaviors) lead to differences in outcomes of specific interest (e.g., food and non‐food expenditure). The household bargaining model is used to study the effects of credit, both formal and informal, on consumption choices. The focus is on the household expenditure patterns and participation in the credit market is taken as the measure of bargaining between the head and the spouse. This article uses the International Food Policy Research Institute's Food Management and Research Support Project (IFPRI‐FMRSP) household survey of Bangladesh for the years 1998–99. OLS is used to estimate the food share and personal care share equations, and Tobit models are used to estimate the 10 other non‐food budget shares. Our results indicated that more men compared to women participate in the credit market. Amount of credit taken by the male household head negatively affects food expenditure and positively affects the share spent on adult goods. The negative effect on food expenditure has policy implications related to nutritional intake and educational attainment of children in the household. Women's use of credit has a positive impact on the expense of children's goods, durable goods, education, and housing. The results show that resources in the hands of women have implications for improvement in child outcomes, especially educational outcomes.

Suggested Citation

  • Anuja Jayaraman & Jill L. Findeis, 2012. "Gender Relations and Effect of Credit Availability on Household Expenditure: Evidence from Rural Bangladesh," Poverty & Public Policy, John Wiley & Sons, vol. 4(4), pages 205-222, December.
    • Handle: RePEc:wly:povpop:v:4:y:2012:i:4:p:205-222
    DOI: 10.1002/pop4.18
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