Bargaining and household dynamics: The impact of education and financial control on nutrition outcomes in South Africa

Conventional economic analysis of household spending is largely based on bargaining models, where different members of a household may have conflicting views on the allocation of communal resources. Not surprisingly, much of the work in this area is based on a game theoretic approach, although empirical analysis that concentrates predominantly on OECD countries has not been totally convincing. A related literature on household expenditure patterns that has a particular emphasis on child nutrition in developing countries has been more successful, and here consistent patterns have been found. There is widespread agreement that, with respect to expenditures on food, female income is more important than male income and that women place a higher priority on child welfare than do men. Subsequently, since earnings and education are generally highly positively correlated, the education of women is a very effective method of improving child welfare. Finally, a third area in the literature focuses on household financial management. This is associated with the sociology of Jan Pahl, where households are classified in terms of financial management systems and the ability to have control over financial assets, although this approach rarely is extended to explain household expenditure patterns. This paper proceeds as follows. Section 1 examines the relevant literature, and seeks to provide a link between the various contributions. Section 2 describes the data and the models used in the estimation. The next section reports and discusses the results. Section 4 concludes by discussing some policy implications.