An Economic Analysis Of Family Public Good Problem And Free-rider Behavior

The family is the most primitive,fundamental,and common social organization for human society,it influences individual behavior to a large extent.Based on social-economic theories and historical factors,this paper investigates the family public good problem and the free rider behavior of family members in imperial Chinese family,and provides an institutional explanation for the exploitation on unmarried daughter.First,this paper historical investigates the family structure,and the cause and the consequence of conflicts among family members.The paradox of the ideal of equal treatment among brothers and the de facto unequal treatment caused by age and experience leads to potential economic and emotional conflicts between brothers.When the parental authority declines and brother's wife provokes the brothers' affection,this paradox results into the conflict of collective morality and brothers' personal interests.In order to maximize the benefits of their sub-families,brothers compete and free ride on family wealth.On the one hand,they reduce the effort in family production;on the other hand,they increase demand for consumption,resulting in a decline of family organizational efficiency and a loss of overall household utility.Second,based on existing family decision-making model and related theories from family economics,this paper models a family decision-making process in the extended family structure.According to the analysis of the parent's unitary decision-making mechanism and the brothers' collective game mechanism,this paper establishes a family decision-making analysis model suitable for the participation of both parents and brothers in traditional extended Chinese family.Because the theoretical model introduces the envy utility into the personal utility function and the effort into the family production function,this paper reveals the free-riding behavior and its consequences between brothers due to economic interests and emotional gains and losses.Through the investigation of family equilibrium and internal incentives,the major conclusion of this paper is that the structure of the extended family will inevitably lead to the problem of family public goods and free-riding behavior of family members,and in order to motivate sons to work hard and improve family efficiency,parents will eventually choose to sacrifice their daughter's interests.Last,this paper investigates the relationship between unmarried sister and her brother outcomes to empirically test the hypothesis of the exploitation on unmarried sister from her natal family.This paper argues that the unmarried sister as a free family public good provider,parents and brothers have economic motivations to free ride on her unpaid housework.The proxies for brother outcomes are brother fertility and educational outcomes.Fertility is not only about reproduction,but also about old-age security and the continuation of the family line.The educational achievement is the only way to obtain official careers and huge wealth in traditional agricultural society,which can bring infinite honor to families and clans.The results show that unmarried sister increases the probability of her brother to have another child and obtain an official student title.The primary conclusions of this paper are as follows:(1)Due to the self-interests,brothers choose to free ride on each other's effort,this leads brother to shirk in family producing and increase demand for consumption,and those brothers who with strong envy preferences and low personal capability have a greater probability to choose a lower level of effort;(2)The family public good problem and free-riding behavior can be solved by intrahousehold distributional rules,however,due to the limited family resource,parents inevitably choose not only to transfer the economic benefits of daughter to son,but also to increase the daughter's work intensity to increase their labor output to incentive brother;(3)Firstborn privilege,parental authority,and collectivism have changed the free-riding incentives of family members to a certain extent,and improved the organizational efficiency of the extended family;(4)The parental family have economic motivation to free ride on unmarried sister's unpaid housework,an unmarried sister not only increases the probability of her brother to have another birth,but also increases the probability of her brother to obtain an official student title;(5)There is a competition for the service of unmarried sister between selfinterested brothers,an unmarried brother shows the resource dilution effect,while an married brother shows resource competition effect;(6)The status of brothers affect male sibling effects,an older brother has a positive effect on younger brother's outcome,while an younger brother does not has the similar effect.This paper contributes to the study of family decision-making research in an extended family structure,and provides an institutional explanation for gender bias,first-born privilege,parental authority,and collective morality.This paper also adds to new discussion of sibling effects on fertility and educational outcome based on co-residential family structure and provides a new family public good explanation.The family system is the most fundamental institution in history and shapes an individual's behavior and characteristics.Without a doubt,the study of the Chinese family is essential for the understanding of Chinese history and religious,political and economic life because the historical Chinese family system has had long-lasting effects on modern society.