Despite the fact that the majority of savings decisions are made at the household level, very little is understood about how spouses with different time preferences make decisions about allocating money. There is little empirical work on intra-household financial decision-making, often because it is hard to elicit honest responses from both spouses about what happens within the household through survey questions. This project uses both laboratory experiments and household surveys carried out in Mindanao, the Philippines; the research elicits time preference of both spouses, as well as fear of expropriation and trust with financial decisions in the household, under randomly varied conditions of privacy, spousal presence, and negotiation with one's spouse.
This study is among the first to bring spouses into the lab to make financial decisions and to correlate their laboratory outcomes with household-level variables about savings and assets. It provides a new application of experimental methodology to advance understanding of intra-household decision making, and has implications for decreasing conflict and overcoming obstacles to mobilize savings at the household level. Gaining a better understanding of intra-household dynamics is critical to ensuring that programs aimed at improving livelihood have a more sustainable and balanced impact.
