Intra-household allocation of resources and family decision-making

In recent years the study of decision-making within the household has received considerable attention. The extent to which members of the same household individualistically pursue their self-interest as opposed to being characterized by a group sharing a common goal is an important question for many areas of scientific inquiry. Theoretical models of family decision-making that highlight the role of the individual have been developed but, while they provide sharp empirical predictions, testing lags far behind. This dissertation provides a comprehensive empirical assessment of these models using rich micro-level data sets from developing countries.;At the core of models of the household that highlight individual actors is the idea that observed behavior is the result of negotiations amongst family members, reflecting each individual's perception of costs and benefits as well as his or her relative "power" in asserting private preferences at the household level. The dissertation begins with the investigation of the hypothesis that bargaining power affects the allocation of household resources. Chapter 1 exploits an exogenous source of variation provided by the extension of alimony rights to women in Brazil as proxy for the redistribution of power within intact relationships. Results indicate that the empowerment of women reduces hours worked by females and impacts the level of investment in the human capital of the next generation. This suggests that models of the family should take intra-household heterogeneity in preferences into account.;Does the intra-household heterogeneity in preferences preclude an efficient allocation of resources? Chapter 2 addresses this important question. In particular, it examines the empirical validity of restrictions derived from a Pareto-efficient model. Contrary to previous results in the literature, Evidence drawn from West African farm households strongly suggests that representations based on cooperation amongst household members do apply to such context.;Finally, Chapter 3 examines how the predicted price-responsiveness differs amongst alternative models of decision-making. The evidence drawn from the behavior of Ghanian households indicates that compensated price responses are not symmetric, suggesting that prices also affect the intra-household balance of power. Importantly, the estimated departures from symmetry are shown to conform to restrictions imposed by a Pareto-efficient model.