Joint Production and Household Bargaining: an experiment with spouses in rural Tanzania
Title: Joint Production and Household Bargaining: an experiment with spouses in rural Tanzania, with M. van den Berg
Presenter
Ian Levely, post-doctoral researcher
Development Economics Group at Wageningen University.
Bio:
Ian is a post-doctoral researcher at the Development Economics Group at Wageningen University in the Netherlands. He is currently a visiting scholar at the University of Michigan. His main areas of interest are development economics (particularly in post-conflict societies), and behavioral and experimental economics.
Time and location
North Quad 4330, Thursday (1:00-2:00) pm
Abstract
Many small-holder farmers exhibit seemingly inefficient behavior, raising multiple crops, each grown primarily by one individual, rather than concentrating household effort on the most profitable crop. A potential explanation is that a spouse’s control over the household budget increases with private earnings, but not with the share of earnings from a joint venture. We test this using a framed field experiment with married couples in rural Tanzania. Spouses were assigned work in a real-effort task, earning vouchers that they spent together. In some treatments, we divided the task into multiple “projects”. We find that earning more increases bargaining power, but not if that income is earned from a “joint” project that involved both spouses. In a related choice experiment, we find that many subjects avoid joint projects, even when it is costly, and that these choices are correlated with lower agricultural income. Similar mental accounting could explain intra-household decision-making in other settings.