Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Gothenburg, Department of Economics

No 465: Household Decision Making in Rural China: Using Experiments to Estimate the Influences of Spouses

Fredrik Carlsson (), Haoran He (), Peter Martinsson (), Ping Qin () and Matthias Sutter ()
Additional contact information
Fredrik Carlsson: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Haoran He: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Peter Martinsson: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Ping Qin: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Matthias Sutter: Department of Public Finance, University of Innsbruck

Abstract: 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-codes: C91; C92; C93; D10

28 pages, August 17, 2010

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