Mine, Yours or Ours? The Efficiency of Household Investment Decisions: An Experimental Approach

Abstract This article sheds light on the impact on household investment efficiency of a social norm that a man should not earn less than his wife. The experiment distinguishes this impact from that of spouses’ desire for control over household resources. Both husbands and wives are found to sacrific...

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Bibliographic Details
Published in:The World Bank economic review 2020-10, Vol.34 (3), p.575-596
Main Author: Mani, Anandi
Format: Article
Language:English
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Summary:Abstract This article sheds light on the impact on household investment efficiency of a social norm that a man should not earn less than his wife. The experiment distinguishes this impact from that of spouses’ desire for control over household resources. Both husbands and wives are found to sacrifice household income (efficiency) for greater control; but, consistent with this social norm, husbands alone behave inefficiently if assigned a smaller income share than their spouse. The evidence suggests spiteful behavior among such husbands: they are willing to undercut their own income to narrow the gap with their wives’ earnings. The magnitude of husbands’ inefficiency influenced by this social norm is comparable to that when husbands have the least control over household earnings. These results, taken together with evidence from developed countries, show that this social norm has a persistent effect on household efficiency, distinct from spouses’ economic concerns.
ISSN:0258-6770
1564-698X
DOI:10.1093/wber/lhz043