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Family-type Public Goods and Intra-Household Decision-Making by Co-Resident South African Couples

Intra-household decision-making is a fundamental development issue, particularly so for less-privileged households in developing countries. The current study examines sources of bargaining power that inform financial decision-making processes within co-resident couples and determines how bargaining power and decision-making impact on family-type public goods expenditure. The study uses South Africa’s National Income Dynamic Study (NIDS), which offers a direct measure of financial decision-making responsibility. In terms of analysis, probit regression models are used to establish key economic and non-economic determinants of decision-making for female partners in co-resident couples, while OLS linear regression models are employed to determine the extent to which bargaining power and financial decision-making power influence expenditure on family-type public goods by households. The evidence of the relevance of economic factors for financial decision-making supports bargaining-type models, as postulated by the resource theory. Households with wives who gain a decision-making role via economic empowerment spend more on family-type public goods. The findings suggest that policy has to focus on narrowing heterogamy between wives and husbands through gender mainstreaming and empowerment, which would enhance the decision-making role of women within co-resident couples.

Working paper 735
1 March 2018
RELATED JOURNAL:

Review of Development Economics
16 March 2021
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