Bargaining power and efficiency-rural households in Ethiopia

It appears to be clear from literature that bargaining power associated with greater control over household resources affects the share of an individual's consumption, that is, higher bargaining power leads to higher levels of consumption. However, it has remained unexplored, if and in which way bargaining power has an impact on household production. By applying different stochastic efficiency models, we try to fill this gap by investigating the role of the distribution of productive resources among 558 couples of rural Ethiopian households in determining the outcome of household production. The results clearly confirm that the more equal the allocation of resources, the higher the household's productivity which could be predominantly due to the incentives to participate efficiently in the production process. Copyright © 2007 John Wiley & Sons, Ltd.