Consumption Patterns in Extended Families: the Role of Guests in African Economies

This paper proposes to explain why there are so many guests in African households and to determine the consequences on individual behaviors. The starting point is the assumption that there exists, in traditional societies, a norm, together with a system of sanctions, which states that within the family group (the extended family) everyone should receive the same share of the wealth produced by the group. The mechanism of hospitality resulting from this norm is very similar to the ultimatum game. We use a model in which people refer to a social norm which can be revised by a Bayesian process. This model of social pressure is applied when information is asymmetric, and we show how the structure of consumption is modified by the presence of guests in the household. If a part of information on expenditures of the head is private, the head will probably reduce his expenditures on goods whose consumption is observable, and increase expenditures on goods whose consumption is harder to observe, in order to not redistribute. We estimate a demand system by using a budget-consumption survey carried out in Gabon in 1994. We show that the pattern of consumption depends on the presence of guests in the household and varies with the sex and the age of the guests.