IZA DP No. 5127: Household Decision Making in Rural China: Using Experiments to Estimate the Influences of Spouses
revised version published in: Journal of Economic Behavior and Organization, 2012, 84 (2), 525-536
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.