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Tests of Income Pooling in Household Decisions

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Author Info
Valerie Lechene
Orazio Attanasio

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Abstract

Using the Progresa data from Mexico, we investigate intra-household decision making using a variety of outcomes. We exploit both the experimental nature and the (short) panel dimension of the data to measure the impact of exogenous changes in the intra-household distribution of resources on household decisions. We test for global pooling of resources within households, which would correspond to the unitary model of household decision making. We also exploit a set of questions about power and the decision making process in the household to investigate aspects of strategic interactions between household members. Our findings confirm previous rejections of income pooling. We also cannot reject that the wife`s relative income share is a significant determinant of the wife`s decision making power in the household, with a higher share of income associated with more decision making power.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 106.

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Date of creation: 2002
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Handle: RePEc:oxf:wpaper:106

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Keywords: social welfare program; intra-household allocation; unitary model;

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Find related papers by JEL classification:
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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  1. Thomas, D., 1989. "Intra-Household Resource Allocation: An Inferential Approach," Papers 586, Yale - Economic Growth Center.
  2. Browning, M. & Bourguignon, F. & Chiappori, P.A. & Lechene, V., 1992. "Incomes and Outcomes: A structural Model of Intra-Household Allocation," DELTA Working Papers 92-23, DELTA (Ecole normale supérieure).
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  3. Lundberg, S.J. & Pollak, R.A. & Wales, T.J., 1994. "Do Husbands and Wives Pool Their Resources? Evidence from U.K. Child Benefit," Discussion Papers in Economics at the University of Washington 94-6, Department of Economics at the University of Washington.
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