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Is it money or brains? The determinants of intra-family decision power

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  • Graziella Bertocchi

    ()

  • Marianna Brunetti

    ()

  • Costanza Torricelli

    ()

Abstract

We empirically study the determinants of intra-household decision power with respect to economic and financial choices using a suitable direct measure provided in the 1989-2010 Bank of Italy Survey of Household Income and Wealth. Focusing on a sample of couples, we evaluate the effect of each spouse's characteristics, household characteristics, and background variables. We find that the probability that the wife is in charge is affected by household characteristics such as family size and total income and wealth, but more importantly that it increases with the difference between hers and her husband's characteristics in terms of age, education, and income. The main conclusion is that decision-making power over family economics is not only determined by strictly economic differences, as suggested by previous studies, but also by differences in human capital and experience. Finally, exploiting the time dimension of our dataset, we show that this pattern is increasing over time.

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Paper provided by University of Modena and Reggio E., Faculty of Economics "Marco Biagi" in its series Department of Economics with number 0686.

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Length: pages 39
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:mod:depeco:0686
Contact details of provider: Web page: http://www.economia.unimore.it/
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Keywords: Family economics; intra-household decision power; gender differences;

Other versions of this item:

Find related papers by JEL classification:
  • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
  • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
  • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
  • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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  1. Raquel Fernandez & Alessandra Fogli, 2005. "Culture: An Empirical Investigation of Beliefs, Work, and Fertility," NBER Working Papers 11268, National Bureau of Economic Research, Inc.
  2. Graziella Bertocchi & Marianna Brunetti & Costanza Torricelli, 2008. "Marriage and Other Risky Assets: A Portfolio Approach," Department of Economics 0606, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
  3. Melanie Lührmann & Jürgen Maurer, 2007. "Who wears the trousers? A semiparametric analysis of decision power in couples," CeMMAP working papers CWP25/07, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  4. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-74, June.
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  8. Leora Friedberg & Anthony Webb, 2006. "Determinants and Consequences of Bargaining Power in Households," Working Papers, Center for Retirement Research at Boston College wp2006-13, Center for Retirement Research, revised Jun 2006.
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  10. John R. Lott & Jr. & Lawrence W. Kenny, 1999. "Did Women's Suffrage Change the Size and Scope of Government?," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1163-1198, December.
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  12. Jianakoplos, Nancy Ammon & Bernasek, Alexandra, 1998. "Are Women More Risk Averse?," Economic Inquiry, Western Economic Association International, vol. 36(4), pages 620-30, October.
  13. Lusardi, Annamaria & Mitchell, Olivia S., 2008. "Planning and financial literacy: How do women fare?," CFS Working Paper Series 2008/03, Center for Financial Studies (CFS).
  14. Susan Lewis & Valerie Oppenheimer, 2000. "Educational assortative mating across marriage markets: Nonhispanic whites in the United States," Demography, Springer, vol. 37(1), pages 29-40, February.
  15. Raquel Fernandez & Nezih Guner & John Knowles, 2001. "Love and Money: A Theoretical and Empirical Analysis of Household Sorting and Inequality," NBER Working Papers 8580, National Bureau of Economic Research, Inc.
  16. Daniela Del Boca & Silvia Pasqua, 2003. "Employment Patterns of Husbands and Wives and Family Income Distribution in Italy (1977-98)," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 49(2), pages 221-245, 06.
  17. Iyigun, Murat & Walsh, Randall P., 2005. "Building the Family Nest: Pre-Marital Investments, Marriage Markets and Spousal Allocations," IZA Discussion Papers 1752, Institute for the Study of Labor (IZA).
  18. Lena Edlund & Rohini Pande, 2002. "Why Have Women Become Left-Wing? The Political Gender Gap And The Decline In Marriage," The Quarterly Journal of Economics, MIT Press, vol. 117(3), pages 917-961, August.
  19. Jay Teachman, 2002. "Stability across cohorts in divorce risk factors," Demography, Springer, vol. 39(2), pages 331-351, May.
  20. Sunden, Annika E & Surette, Brian J, 1998. "Gender Differences in the Allocation of Assets in Retirement Savings Plans," American Economic Review, American Economic Association, vol. 88(2), pages 207-11, May.
  21. Frances Woolley, 2000. "Control over Money in Marriage," Carleton Economic Papers 00-07, Carleton University, Department of Economics, revised 2003.
  22. Brad M. Barber & Terrance Odean, 2001. "Boys Will Be Boys: Gender, Overconfidence, And Common Stock Investment," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 261-292, February.
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Cited by:

  1. Bertocchi, Graziella & Bozzano, Monica, 2013. "Women, Medieval Commerce, and the Education Gender Gap," IZA Discussion Papers 7224, Institute for the Study of Labor (IZA).
  2. Grabka, Markus M. & Marcus, Jan & Sierminska, Eva, 2013. "Wealth Distribution within Couples," IZA Discussion Papers 7637, Institute for the Study of Labor (IZA).
  3. Stefano Cosma & Elisabetta Gualandri, 2014. "The sovereign debt crisis: the impact on the intermediation model of Italian banks," BANCARIA, Bancaria Editrice, vol. 2, pages 48-60, February.
  4. Graziella Bertocchi & Monica Bozzano, 2014. "Family Structure and the Education Gender Gap: Evidence from Italian Provinces," Center for Economic Research (RECent) 103, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
  5. Chiara Pederzoli & Costanza Torricelli, 2013. "Efficiency and unbiasedness of corn futures markets: New evidence across the financial crisis," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 13091, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
  6. repec:mod:depeco:0007 is not listed on IDEAS
  7. Elisabetta Gualandri & Valeria Venturelli, 2013. "The financing of Italian firms and the credit crunch: findings and exit strategies," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 13101, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".

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