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Intra-household decisions making on intertemporal choices: An experimental study in rural China

Xiaojun Yang () and Fredrik Carlsson ()
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Xiaojun Yang: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O.Box 640, SE 40530 GÖTEBORG

No 537, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: In this paper, we conduct a high stake experiment in rural China to investigate the determinants of individual and joint decisions regarding intertemporal choices, and estimate the relative influence of spouses on the joint decisions. We use the Convex Time Budget experimental method to elicit individual and joint decisions on how much money to allocate to an early and a later date. We find that the rates of return have significant effects on the decisions, yet both individual and joint decisions exhibit present-biased time preferences. We also find that both spouses have a significant influence on joint decisions. However, husbands have a stronger influence than wives. Although there are few individual and household characteristics related to the relative influence, we do find a link between relative influence in the experiment and households’ decisions on financial savings in real life. We also find that neither the order of the individual and joint decisions nor the initial control of the endowment in the joint decision affects the behavior in the experiment.

Keywords: household decision-making; intertemporal choices; Convex Time Budget; relative influence (search for similar items in EconPapers)
JEL-codes: C91 C92 C93 D10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp
Date: 2012-09-14
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