Do Opposites Detract? Intrahousehold Preference Heterogeneity and Inefficient Strategic Savings
American Economic Journal: Applied Economics
vol. 7,
no. 2, April 2015
(pp. 135-74)
Abstract
This paper uses a field experiment to test whether intrahousehold heterogeneity in discount factors leads to inefficient strategic savings behavior. I gave married couples in rural Kenya the opportunity to open both joint and individual bank accounts at randomly assigned interest rates. I also directly elicited discount factors for all individuals in the experiment. Couples who are well matched on discount factors are less likely to use costly individual accounts and respond robustly to relative rates of return between accounts, while their poorly matched peers do not. Consequently, poorly matched couples forgo significantly more interest earnings on their savings. (JEL D13, D14, J12, O12)Citation
Schaner, Simone. 2015. "Do Opposites Detract? Intrahousehold Preference Heterogeneity and Inefficient Strategic Savings." American Economic Journal: Applied Economics, 7 (2): 135-74. DOI: 10.1257/app.20130271Additional Materials
JEL Classification
- D13 Household Production and Intrahousehold Allocation
- D14 Household Saving; Personal Finance
- J12 Marriage; Marital Dissolution; Family Structure; Domestic Abuse
- O12 Microeconomic Analyses of Economic Development
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