Does personality affect the allocation of resources within households?

TL;DR

This study investigates how personality traits influence resource distribution within households, showing that personality differences affect bargaining power and resource allocation among couples.

Contribution

It introduces a model linking personality traits to household resource allocation and provides empirical evidence using Dutch survey data.

Findings

Personality traits influence intrahousehold resource shares.

Differences in conscientiousness and self-esteem affect bargaining outcomes.

Personality acts as a distribution factor in household decision-making.

Abstract

This paper examines whether personality influences the allocation of resources within households. To do so, I model households as couples who make Pareto-efficient allocations and divide resources according to a distribution function. Using a sample of Dutch couples from the LISS survey with detailed information on consumption, labor supply, and personality traits at the individual level, I find that personality affects intrahousehold allocations through two channels. Firstly, the level of these traits acts as preference factors that shape individual tastes for consumed goods and leisure time. Secondly, by testing distribution factor proportionality and the exclusion restriction of a conditional demand system, I observe that differences in personality between spouses act as distribution factors. Specifically, these differences in personality impact the allocation of resources by affecting the bargaining process within households. For example, women who are relatively more conscientious, have higher self-esteem, and engage more cognitively than their male partners receive a larger share of intrafamily resources.