Theoretical Models Analysing Intra-Household Resource Allocation: (By Tausi
Kida)
Unitary Approach – Common Preference Model: The unitary models also referred as
“Common Preference Model” or the “Benevolent Dictator “Model” mainly describes how
the household acts as one. According to Becker 1991 – 1992 Nobel Prize Winner in
Economics- “revealed that in accordance with a single set of preferences, the household
combines time, goods purchased in the market, and goods produced at home to produce
commodities that generate utility for the household” The fundamental assumption in this
model is that there are exists a parental or household, welfare function in which all
resources are pooled together- capital, labour, land and information.
The development of these models also based on the strong assumption that in a utility
maximizing household the actions of all household members are being determined by the
preference of the head of the household. In this case the preference of the head becomes
automatically the preference of the whole household. This assumption was based on the
understanding that although people are individual utility maximizers but their utility is
also being determined by the happiness of the others in their households. It is assumed
that the head of household will take into account the feelings of their household members
in the decision they are making.
However, this approach has been strongly criticized for not being able to capture the
process of household decision-making. Based on its strong assumption, it is questioned if
in real life the household head is all that altruistic. Furthermore, the feminists and
Institutional economists have been criticising the unitary models for failing to deal with
individuals that make up family, and also in recognising some of the key aspects like
gender and age based power relations that are important aspects in structuring resource
allocation.
Bargaining Models (Co-operative) of Household Decision Making: In these models
households are understood as collective decision units and the intra household decisionmaking regarding the welfare and distribution of resources is referred to be very complex.
The single utility hypothesis referred in unitary approaches is also regarded as ad hoc in
explaining the underlying circumstances. The Bargaining Models of Household decisionmaking shares the two main assumptions: (i) Individual household members have distinct
tastes and preferences that cannot necessarily be aggregated into a single welfare or utility
function. (ii) The outcome of intra-household resource allocation varies systematically
based on individual members’ bargaining power. (Kutz 1997 pg 29).
The models assume that the household operates in an agreement that household
members participate in the decision-making. The members are able to bargain and the
difference between men and women are mainly based on their bargaining power and/or
willingness to bargain for their own interests, rather than who makes the decision. The
bargaining models also take into account the situation where the bargaining process
fails. In a bargaining process, the favourable outcome is achieved at a point where
people can walk away if they don’t like the arrangement, and this point is called the
“Fall Back Position or Threat Point”. This is the point that shows how individuals
within the household would fare if the cooperation broke down.
In this case, the
outcome of the bargaining process is becoming more favourable to the individuals
whom when the cooperation fails they will be in a better fall back position.
(Himmelweit, S. 1998 pg 200-215)
The fall back position in the bargaining models indicates the influence of power
between household members in governing the household decision-making process. This
to say power has a role in the household decisions on the distribution of resources
among its members. In these models the process of decision making is more democratic
as compared to the Unitary models but power with the process tends to favour those
who have better fall back position when the arrangement does not work. Sen A. (1990)
also put forward his contribution on the bargaining models by arguing that power is also
exercised through perceptions. He agued that power within households is also
influenced by the way people take into account the contribution they or other household
members are making and this has influence in determining their fall back position. He
argued that bargaining power within the household members differs and this has an
impact on attainment of entitlements between household members. This difference is
determined by the extent/magnitude of contribution that a person within the household
is perceived to make. This is to say the more the household member is perceived to
contribute in the overall household resources the greater is the power and chances on
commanding the resources.
Therefore in the bargaining models the members of household will remain in it when
the benefits associated in doing so exceed those obtainable from remaining alone. This
is because there are existence of economies of scale associated with sharing in
production and consumption of certain household goods that can in turn lead to surplus
that will be distributed across household members (Haddad 1997).
However the cooperative household bargaining models have been criticized for treating
individual household members symmetrically with respect to their right and ability to
enter into the household bargaining process. Furthermore the models have also been
criticized for not elaborating clearly the household resource allocation process. (Katz
1997 PP25) The key weakness of these models lies on its failure to deal with individual
who make up the family, lack of recognition of systematic gender and age base power
relations that are the key aspects in structuring household’s resource allocation.
Gender Dimension of Intra-Household Economics: Non-Cooperative Models
The non-cooperative models challenge the main assumption in the cooperative models
that family members agree to and stand for bargaining rule which allocate decisionmaking power on the basis of threat points. In the context of non-cooperative models
the gender of a person matters especially in the way that the decisions are made and the
distribution of resources are conducted within the household. The non-cooperative
models are based on the three features of family life and these are asymmetric
information, enforcement problems and inefficiency (Katz 1997). While cooperative
model based on the assumption of perfect information between household members
however the literature indicates that members of the same household are in most cases
unaware of each other’s income, ownership of assets and time use (Hachschild 1990,
Zelizer 1994)
The solutions in non-cooperative models are not characterized by Pareto efficiency this
is mainly due to assumption of asymmetry information between household members.
The outcomes of these models are also sensitive to the distribution of current income
between individuals within the family.
In review of models above I can conclude that the
process and the decision
mechanisms around Intra household allocation of resources is complex. Its
understanding requires taking into consideration the concerns of individuals and the
power relations, including gender and age, within the household settings. The current
theoretical focus that has been put forward through the non cooperative intra household
models is important in providing richer characterization of household structure and
processes, and also explaining the impact of differences in power among family
members with respect to resource allocation.
Additional references on this subject :
Behrman J. 1988. Intra-Household Allocation of Nutrients in Rural India: Are boys
favoured? Do Parents Exihibit Inequality Aversion? Oxford Economic Papers Vol 40
Chawla, A.J. 1993. Intra-Household Resource Allocation: A Principal Analysis with
Empirical Evidence. PhD Dissertation, Department of Economics, University of
Michigan
Deaton.A. 1987. The Allocation of Goods within the Household: Adults, Children and
Gender” Living Standards Measurement Study, Working Paper No. 39, World Bank,
Washington
Evans A. 1989. Gender Issues in Rural Household Economics. IDS DP 254
Guyer Jane and Pauline Peters. 1987. Introduction- Conceptualizing the Household,
Issues of Theory and Policy in Africa. Special Issue, Development and Change,
18(2):197-214
Haddad Lawrence, John Hoddinott, and Harold Alderman Eds ., 1997. Intrahousehold Resource Allocation in Developing Countries: Models, Methods and
Policy, International Food Policy Research Institute, London: John Hopkins
University Press
Handa S. 1994. Gender, Headship and Intra-household Resource Allocation. World
Development, Vol 22 (10): 1535-1547
Himmelweit S, Trigg A., Costello N., Dawson G., Mackintosh M., Simonetti R., and
Wells J. 1998. “Households” Social Sciences Third Level Course, Understanding
Economic Behaviour: Households, Firms and Markets. The Open University, Milton
Keynes, UK
Holvoet N. 2003. Household Matters: On the Usefulness of an Institutional Approach
for Understanding Intra-household Allocation. Institute of Development Policy
Management, Antwerp, Discussion Paper 3
Hochschild. A. 1990. The Second Shift. New York. Avon Books
Katz Elizabeth .1997. The Intra-Household Economics of Voice and Exit. Feminist
Economics 3(3):25:46
Patton J. 1993. The Intra-household Allocation of Resources in Cote D’ivoire: Is the
Evidence of Gender Bias?
Pollak, R.A. 1994. Taking Power Seriously. Department of Economics, University of
Washington
Rogers BL., and Nina Schossman. 1983. Intra-household Resource Allocation: Issues
and Methods for Development Policy and Planning. Paper prepared for the workshop
on methods of measuring intra-household resource allocation.
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Sen .A. 1990. “Gender and Cooperative Conflicts” In eds Tinker I. “Persistent
Inequalities: Women and World Development” Oxford University Press. .
Sen .A. 1984. Family and Food: Sex Bias in Poverty. In Sen. A. (ed) 1984 Resources,
Values and Development Vol 6.
Strauss.J. 1990. Household, Communities and Pre-School Children’s Nutrition
Outcomes: Evidence from Rural Cote DÍvore” Economic Development and Cultural
Change Vol.38
Svedberg. P. 1990. Under nutrition in Sub-Saharan Africa: Is there Gender Bias:
Journal of Development Studies Vol 26
Zelizer, Viviana A. Rotman, 1994. The Social Meaning of Money. New York,Basic
Books