Intra-Household Efficiency: An Experimental Study from Ethiopia

29 Pages Posted: 25 Apr 2011  

Bereket Kebede

University of East Anglia - School of International Development and CBESS

Marcela Tarazona-Gómez

University of Toulouse 1

Alistair Munro

National Graduate Institute for Policy Studies (GRIPS); University of London, Royal Holloway College - Department of Economics

Arjan Verschoor

University of East Anglia (UEA)

Date Written: April 24, 2011

Abstract

This paper uses different versions of a voluntary contribution mechanism in experimental games to test for household efficiency. Efficiency is decisively rejected in all treatments casting doubt on ‘unitary’ and ‘collective’ household models – significant amounts of potential surplus are not realised. Efficiency is rejected whether initial endowments are equally split between spouses or only one spouse takes all. Similarly, efficiency is also rejected with all variations in allocations, whether the household common pool is split equally between the spouses or allocated by the husband or the wife. Information on initial endowments of spouses improves efficiency in some treatments while not having an effect in others suggesting that the role of information is context dependent. Actual and expected contribution rates of spouses are systematically different; husbands’ expectations of their wives’ contributions are higher than actual contributions and wives’ expectations of their husbands’ contributions are lower than actual contributions. These systematic errors in expected and actual behaviour indicate that the attainment of equilibrium in a game theoretic framework is unlikely. Statistical tests indicate that instead of efficiency other considerations like norms are likely important. Overall, most of the empirical results cast doubt on cooperative models and provide some support for behaviour guided either by fairness or other norms. The data are collected from 1,200 married couples in three sites in Ethiopia.

Keywords: household efficiency, intra-household models, experimental games, Ethiopia

JEL Classification: D13, C93, D03

Suggested Citation

Kebede, Bereket and Tarazona-Gómez, Marcela and Munro, Alistair and Verschoor, Arjan, Intra-Household Efficiency: An Experimental Study from Ethiopia (April 24, 2011). Available at SSRN: https://ssrn.com/abstract=1821225 or http://dx.doi.org/10.2139/ssrn.1821225

Bereket Kebede (Contact Author)

University of East Anglia - School of International Development and CBESS ( email )

Norwich Research Park
Norwich, Norfolk NR4 7TJ
United Kingdom

HOME PAGE: http://www.uea.ac.uk/dev/People/Academic/kebede

Marcela Tarazona-Gómez

University of Toulouse 1 ( email )

Place Anatole France
Toulouse Cedex, F-31042
France

Alistair Munro

National Graduate Institute for Policy Studies (GRIPS) ( email )

Tokyo
Japan

HOME PAGE: http://www.grips.ac.jp/

University of London, Royal Holloway College - Department of Economics ( email )

Royal Holloway College
Egham
Surrey, Surrey TW20 0EX
United Kingdom

Arjan Verschoor

University of East Anglia (UEA) ( email )

Norwich Research Park
Norwich, Norfolk NR4 7TJ
United Kingdom

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