{"id":822,"date":"2016-01-18T16:57:15","date_gmt":"2016-01-18T16:57:15","guid":{"rendered":"http:\/\/blogs.kent.ac.uk\/economics\/?p=822"},"modified":"2020-03-17T12:08:24","modified_gmt":"2020-03-17T12:08:24","slug":"intra-household-resource-allocation-and-familial-ties","status":"publish","type":"post","link":"https:\/\/blogs.kent.ac.uk\/economics\/2016\/01\/18\/intra-household-resource-allocation-and-familial-ties\/","title":{"rendered":"Intra-household resource allocation and familial ties"},"content":{"rendered":"

A new discussion paper by\u00a0Harounan Kazianga and Zaki Wahhaj<\/span><\/a>, KDPE 1601<\/span><\/a>, January 2016<\/p>\n

Non-technical summary<\/strong><\/p>\n

The question as to how resources are allocated within households has long been of interest to\u00a0economists. Particularly in societies where state support and market institutions are weak, the\u00a0household remains an important unit of production, and investment in the human capital of\u00a0children.<\/p>\n

The two theories of intra-household allocation that have received the most attention in the\u00a0academic literature and tested most frequently using household data are the Unitary Model and\u00a0the Collective Model. The Unitary Model, which postulates that the household behaves as if it\u00a0were a single individual, has been consistently rejected by empirical evidence.<\/p>\n

On the other\u00a0hand, tests of the Collective Model, which postulates that household members with conflicting\u00a0preferences are able to achieve Pareto efficient outcomes, have yielded mixed results — not\u00a0rejected for labour supply decisions in developed countries or consumption decisions in\u00a0developing countries, but commonly rejected for production in African households.<\/p>\n

In this paper we investigate intra-household resource allocation in rural Burkina Faso and show\u00a0that, within the same geographic, economic and social environment nuclear-family households\u00a0achieve near Pareto efficiency in allocating productive resources and Pareto efficient allocation\u00a0of consumption, while extended-family households do not.<\/p>\n

We propose a theory where household members with closer familial ties exhibit higher levels of\u00a0altruism towards each other, which in turn motivate them to make intra-household transfers close\u00a0to that required for efficiency. The theory predicts that household members who share a nuclear\u00a0family tie (as opposed to an extended-family tie or no family ties) should contribute higher levels\u00a0of labour on each other’s individually owned farm plots, and this is confirmed by data on\u00a0agricultural labour contributions within the household.<\/p>\n

We argue that the frequent presence of extended-family members and unrelated individuals\u00a0within the household reflects a household’s response to the absence of markets for labour\u00a0exchange and risk-sharing: the additional household members provide extra labour (in exchange\u00a0for room and board and use of household land for farming) and serve as a means of income\u00a0diversification. Consistent with this argument, we find that household heads with more inherited land and exposed to greater income volatility (due to local rainfall conditions and the\u00a0characteristics of their inherited land) are more likely to end up with extended-family\u00a0households.<\/p>\n

The wider implication of the analysis is that as markets develop and agricultural land scarcity\u00a0increases, extended-family households should give way to nuclear family households. This\u00a0should result in more efficient allocation of resources for production and consumption because of\u00a0the ties that bind together members of the nuclear family.<\/p>\n","protected":false},"excerpt":{"rendered":"

A new discussion paper by\u00a0Harounan Kazianga and Zaki Wahhaj, KDPE 1601, January 2016 Non-technical summary The question as to how resources are allocated within households … Read more<\/a><\/p>\n","protected":false},"author":37654,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[223908,70],"tags":[],"_links":{"self":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts\/822"}],"collection":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/users\/37654"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/comments?post=822"}],"version-history":[{"count":1,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts\/822\/revisions"}],"predecessor-version":[{"id":823,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/posts\/822\/revisions\/823"}],"wp:attachment":[{"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/media?parent=822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/categories?post=822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.kent.ac.uk\/economics\/wp-json\/wp\/v2\/tags?post=822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}