Husbands, Wives and the Peculiar Economics of Household Public Goods

Understanding how household income is allocated among different types of expenditures is of the utmost importance when considering policy targeted at increasing household well-being. This analysis uses the collective household model to determine how household public goods and household public bads are chosen in light of the relative power balance between husband and wife. This paper shows both theoretically and empirically that the effect of additional female power on household outcomes depends on the initial level of female power. And contrary to previous findings, it need not always be positive. The policy implications of this non-monotonic relationship between female decision-making power and household well-being outcomes are important. The effectiveness of aid to households depends not only on current expenditure levels, but also on household balance of power. More specifically, enhancement of female power, while generally good for child nutrition (more controversially, and the paper shows this theoretically and empirically) there is also a class of situations where this is not so