Household Decision Making in Rural China: Using Experiments to Estimate the Influences of Spouses
30 Pages Posted: 24 Aug 2010
Many economic decisions are made jointly within households. This raises the question about spouses' relative influence on joint decisions and the determinants of relative influence. Using a controlled experiment (on inter-temporal choice), we let each spouse first make individual decisions and then make joint decisions with the other spouse. We use a random parameter probit model to measure the relative influence of spouses on joint decisions. In general, husbands have a stronger influence than wives. However, in richer households and when the wife is older than the husband, we find a significantly stronger influence of the wife on joint decisions.
Keywords: household decision making, spouses, relative influence, random parameter model, field experiment, time preferences
JEL Classification: C91, C92, C93, D10
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