Income, Gender, and Consumption: A Study of Malawian Households
Davies, Simon, The Journal of Developing Areas
This paper uses 1998 household level data from urban Malawi to look at the impact on consumption patterns of the share of total household income accruing to different individuals within the household. Specifically, male and female income shares and other factors which may influence intra-household bargaining such as education are analyzed. The study finds that for some categories of good such as personal and household hygiene and clothing, unitary household models are unsuitable as intra-household relationships and differing preferences of individuals play a key role in consumption choices. Overall the results indicate that females favor household hygiene, vehicle repair and girls' clothing while males favor male clothing. Consumption choices are influenced by both the income and education of the main male and female members, and crucially, the impact of income shares on household consumption is non-linear.
JEL Classifications: D100; D120; D190; D330
Keywords: Household Behavior; Family Economics; Consumer Economics; Personal Income and Wealth Distribution; Economic Development; Africa; Malawi
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By 2015 all 191 members of the United Nations have pledged to meet agreed development goals. These include ensuring that all boys and girls complete a full course of primary schooling; reducing by two thirds the mortality rates of children under 5 years; reversing the spread of AIDS, malaria and other diseases; reducing by three quarters the maternal mortality rate and reducing by half the proportion of people suffering from hunger2. Clearly, in order to meet these challenging targets resources need to be targeted towards the correct areas. Developing country output needs to rise and their economies need to become more productive.
Households in developing countries are able to choose where to spend their income based on their own preference structure. Where their preferences coincide with those of the United Nations, more resources will be targeted towards the above goals as households increase their expenditure on, for example health, education and agricultural production.
However, preferences within families may differ as different categories of goods enter individual utility functions in different ways; some members preferring to spend more on, say, health, while others prefer to spend more on clothing. The weight of each member in the bargaining process may influence the final outcome. Understanding intra-household relationships may then be important in helping to meet Government (or U.N.) targets, as money can be directed towards those judged to spend it in the most "desirable" way.
This paper seeks to answer several key questions. Firstly, is there any evidence that males and females influence household consumption separately? If so, how do male and female preferences differ? In particular, how does greater female power in the household impact on household consumption patterns?
The first part of this study looks at the theory of household decision-making and the empirical results with special regards to developing countries. We then look at expenditure patterns in urban households in Malawi focusing particularly upon the influence which different household members may exert upon the decision-making process and how this may impact upon final outcomes. The final section concludes.
This section aims to give a very brief overview of the competing theoretical models of household income and expenditure choices. We then review the empirical literature of both developing and developed countries paying special attention to any patterns which emerge as well as any salient results.
Despite the fact that micro-economic theory places a great deal of emphasis on the individual, analyses of household expenditure in both a developed and developing country context have often regarded the household as a single decision-making unit. …