Intra-Household Management of Joint Resources: Evidence from Malawi

TL;DR

This paper investigates intra-household resource management in Malawi, revealing partial income pooling and insurance effects, especially for food expenditures, by explicitly accounting for joint income and collaboration among household members.

Contribution

It introduces a novel approach that explicitly models joint income and intra-household collaboration, challenging the assumption of complete resource pooling in household models.

Findings

Evidence of partial income pooling within households.

Identification of intra-household insurance mechanisms.

Revealed dynamics and vulnerabilities among household members.

Abstract

In models of intra-household resource allocation, the earnings from joint work between two or more household members are often omitted. I test assumptions about complete pooling of resources within a household, by accounting for income earned jointly by multiple household members, in addition to income earned individually by men and women. Applied in the case of Malawi, I find that by explicitly including intra-household collaboration, I find evidence of partial income pooling and partial insurance within the household, specifically for expenditures on food. Importantly, including joint income reveals dynamics between household members, as well as opportunities and vulnerabilities which may previously be obfuscated in simpler, binary specifications. Contrasting with previous studies and empirical practice, my findings suggest that understanding detailed intra-household interactions and their outcomes on household behavior have important consequences for household resource allocation and decision making.