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Joint Production and Household Bargaining: an experiment with spouses in rural Tanznania

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  • Levely, Ian
  • van den Berg, Marrit

Abstract

Through three related experiments with spouses in rural Tanzania, we show that intra-household bargaining can lead to inefficient outcomes, as spouses benefit more from private earnings and thus avoid joint projects. We randomly assign labor to spouses in a real-effort task, then observe how income is spent in a in a controlled setting. A spouse’s bargaining power increases only with income earned alone. Female subjects in particular avoid joint projects, even when doing so is costly to the household. Such choices are correlated with lower agricultural income outside the lab. Similar mental accounting and bargaining could explain inefficient intra-household decision-making in this and other settings, where there is a trade-off between maximizing individual and household income.

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  • Levely, Ian & van den Berg, Marrit, 2023. "Joint Production and Household Bargaining: an experiment with spouses in rural Tanznania," SocArXiv pkcqd, Center for Open Science.
    • Handle: RePEc:osf:socarx:pkcqd
    DOI: 10.31219/osf.io/pkcqd
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