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

Author

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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.

Suggested Citation

  • Yang, Xiaojun & Carlsson, Fredrik, 2012. "Intra-household decisions making on intertemporal choices: An experimental study in rural China," Working Papers in Economics 537, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0537
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    File URL: http://hdl.handle.net/2077/30274
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    Cited by:

    1. Alem, Yonas & Hassen, Sied & Köhlin, Gunnar, 2018. "Decision-making within the Household: The Role of Autonomy and Differences in Preferences," Working Papers in Economics 724, University of Gothenburg, Department of Economics.
    2. Isha Chawla & Joseph Svec, 2023. "Household savings and present bias among Chinese couples: A household bargaining approach," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(1), pages 648-672, January.
    3. Savita Kulkarni & Anirudh Tagat & Hansika Kapoor, 2016. "An experimental investigation of intra-household resource allocation in rural India," Working Papers PIERI 2016-20, PEP-PIERI.
    4. Alistair Munro, 2018. "Intra†Household Experiments: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 134-175, February.
    5. Charlotte Ringdal & Ingrid Hoem Sjursen, 2021. "Household Bargaining and Spending on Children: Experimental Evidence from Tanzania," Economica, London School of Economics and Political Science, vol. 88(350), pages 430-455, April.
    6. Alistair Munro, 2015. "Intra-household Experiments: a survey and some methodological observations," GRIPS Discussion Papers 15-03, National Graduate Institute for Policy Studies.
    7. James Andreoni & Charles Sprenger, 2015. "Risk Preferences Are Not Time Preferences: Reply," American Economic Review, American Economic Association, vol. 105(7), pages 2287-2293, July.
    8. Carlsson, Fredrik & Yang, Xiaojun, 2013. "Intertemporal Choice Shifts in Households: Do they occur and are they good?," Working Papers in Economics 569, University of Gothenburg, Department of Economics.
    9. 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.

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    More about this item

    Keywords

    household decision-making; intertemporal choices; Convex Time Budget; relative influence;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D10 - Microeconomics - - Household Behavior - - - General

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