Understanding Pareto Inefficient Intrahousehold Allocations

35 Pages Posted: 5 Dec 2005

See all articles by Richard Akresh

Richard Akresh

University of Illinois at Urbana-Champaign; IZA Institute of Labor Economics

Date Written: November 2005

Abstract

Udry (1996) uses household survey data and finds that the allocation of resources within households is Pareto inefficient, contradicting the main assumption of most collective models of intrahousehold bargaining. He finds that among plots planted with the same crop in the same year, within a given household, those controlled by women produce lower yields than the men's plots. This paper challenges that finding. Using an alternative nationally representative dataset, I find that only households in regions geographically proximate to those studied by Udry exhibit Pareto inefficient intrahousehold allocations, while the rest of the country reveals no evidence of Pareto inefficiencies. Households in regions experiencing negative rainfall shocks are on average less likely to exhibit Pareto inefficient intrahousehold allocations, and these negative rainfall shocks are correlated with increases in labor resources allocated to the wife's plots, further confirming that in bad years, households try to avoid losses from Pareto inefficiency.

Keywords: intrahousehold allocation, collective household models, Pareto efficiency, Africa

JEL Classification: D13, O12, J12, O15

Suggested Citation

Akresh, Richard, Understanding Pareto Inefficient Intrahousehold Allocations (November 2005). IZA Discussion Paper No. 1858, Available at SSRN: https://ssrn.com/abstract=866885

Richard Akresh (Contact Author)

University of Illinois at Urbana-Champaign ( email )

601 E John St
Champaign, IL 61820
United States

IZA Institute of Labor Economics

P.O. Box 7240
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Germany

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