Income pooling and demand aggregation in low-income households in Navi Mumbai, India: evidence from willingness to pay, risky choices and anthropometrics

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  • March 21, 2019
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  • Prabhu, Vimalanand Shrikant
    • Affiliation: College of Arts and Sciences, Department of Public Policy
Abstract
  • Maternal employment brings with it additional income that may result in benefits to the household such as better nutrition and health for family members, and more autonomy for the mother. However, it could also mean less time that a mother has for housework, childcare and leisure. The benefits and costs of maternal employment depend upon how the mother and other household members utilize their time, money and other resources. Thus, a study of the economic benefits of maternal employment should take issues of intrahousehold resource allocation into account. Traditional analyses based on the common preference model neglect the differences in household member preferences and do not account for issues of intrahousehold resource allocation. Emerging empirical evidence and theoretical advances recognize the differences in household member preferences and recommend that we study the bargaining that takes place among households members. While the literature largely has relied on revealed preference data, an integrated approach that combines revealed and stated preference information can help us understand the complexity of intrahousehold resource allocation to the fullest. In this dissertation, I examine issues of intrahousehold resource allocation in the slums of Navi Mumbai, India, through a novel multidimensional approach. The dissertation consists of three modules, each of which examines issues of intrahousehold resource allocation in its own way. In the first module, I examine the differences in husband and wife preferences and evaluate the utility of a short private discussion between husbands and wives in aggregating preferences. In this study, husbands and wives were interviewed separately first and jointly thereafter in a stated preference framework to obtain their household willingness to pay for a malaria vaccine. This protocol is the first of its kind in a developing or an industrialized nation. The second component examines the differences in anthropometric measurements (z-score for height-for-age and stunting) of children of different genders. These differences may be the result of differences in the investment in children’s health over a period of time. The third component examines intrahousehold resource allocation through differences in income pooling behavior when individuals are faced with a risky choice. Both husbands and wives were offered a lottery choice with real monetary payoffs, designed so that the preferred choice by an income pooler was different from that of a non-income pooler. This is the first study of its type in a developing nation. This research also represents the first time that stated preference data, revealed preference data and choice experiment data were analyzed simultaneously. Husbands’ and wives’ stated demand for vaccines differed significantly at lower prices, where respondents had the freedom of budget space. The short private discussion enabled a majority of husbands and wives to reduce differences in their stated demand, with many couples choosing to purchase a vaccine either for all members of the household or for no one. Respondents tended to be especially accommodative of their spouse’s wishes at lower prices. Wives who had some source of income were less likely to change their opinion in a joint interview indicating that they probably had higher autonomy in decision-making. However, analyses of z-score for height of children revealed that daughters of these women were shorter than those of women who did not work. Furthermore, the eldest daughter was likely to be shorter than her other female siblings, but the eldest son was not shorter than his male siblings. Overall, the analysis demonstrates how intrahousehold allocation asserts itself in multiple ways—maternal employment improved the autonomy of women but did not counterbalance the detrimental effects of the mother’s absence from her home on the well being of her daughters, particularly the eldest daughter, who was likely helping her mother with housework and childcare responsibilities from a young age. In the choice experiment (lottery data), I found that a specific rule of intrahousehold resource allocation did not apply universally to all households. Overall, the research rejects the common preference model of intrahousehold resource allocation in slums of India. The stated demand as estimated by a traditional survey that interviewed both husbands and wives randomly from a household is likely to underestimate demand at lower prices and hence the associated welfare benefits.
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  • Whittington, Dale
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  • October 19, 2010

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