Intra-Household Efficiency: An Experimental Study from Ethiopia

Abstract

An experimental design using treatments of a voluntary contribution mechanism is used to test household efficiency. Efficiency is decisively rejected in all treatments contrary to the assumption of most household models. Information on initial endowments of spouses improves efficiency only in some treatments suggesting that the impact of information is context dependent. Actual and expected contribution rates of spouses are systematically different; husbands' (wives') expectations of their wives' (husbands') contributions are higher (lower) than actual contributions. These errors imply that equilibrium in a game theoretic framework is unlikely. Statistical tests indicate other considerations than efficiency are likely important.

Generosity and sharing among villagers: Do women give more?

“…In other words, wives are more likely to keep and prioritize separate budgets than are husbands. Qualitatively similar results were reported by Kebede et al (2014) from experiments in Ethiopia involving various treatments in the form of voluntary contributions. They found that although both men and women chose to keep a portion of their endowments to themselves at the expense of household efficiency, in some of the treatments, men contributed more than women but the women never contributed more than the men in any of the treatments.…”

Heterogeneous households: A within-subject test of asymmetric information between spouses in Kenya

“…This between-subject analysis mimics those used previously in the experimental literature studying household behavior (e.g. Iversen et al (2013), Kebede et al (2014), Mani (2011)), and is analogous to between-subject field experiments (e.g. Ashraf (2009)) and natural experiments studied with cross-sectional surveys (e.g.…”

“…4 Bobonis (2009) and Attanasio and Lechene (2014) find in favor of efficiency in expenditure decisions in Mexico, while Duflo and Udry (2004) and Robinson (2012) find against efficiency in expenditures decisions in Cˆote d'Ivoire and Kenya respectively. Udry (1996) finds against efficiency in agricultural investment decisions in Burkina Faso, while Kebede et al (2014), Iversen et al (2011), and Mani (2011) reject productive efficiency in laboratory games played between spouses in Ethiopia, Uganda, and India respectively.…”

“…Poorly informed couples in Kenya were also more likely to secure money in private savings accounts (Schaner (2014)). In the laboratory, spouses in Ethiopia (Kebede et al (2014)) and India (Castilla (2014)) behaved less cooperatively in secret than when their decisions would be revealed to their spouses.…”

“…Recent field and laboratory studies find evidence that spouses take advantage of private information (Ashraf (2009), Iversen et al (2011), Mani (2011), Munro et al (2013), Kebede et al (2014)) and thus conclude that asymmetric information must be one of the driving causes of inefficiency in the household. However, these previous empirical studies test only for average treatment effects, and by design cannot tell us if all spouses behave a bit opportunistically or if most people do not respond to private information and only a few take severe advantage.…”