Household Matters: On the Usefulness of an Institutional Approach for Understanding Intrahousehold Allocation

This paper presents findings from a study testing the alternative of an institutional approach to model intrahousehold allocative behavior. It argues that the income-pooling test and the conventional neoclassical household models only capture part of allocative behavior as they start from the premise that human behavior is built upon free human agency only. The paper proposes an alternative economic institutional approach and sets out an expanded test framework. Research findings from my own south Indian household survey show that conventional and expanded test results may differ and that unveiling decision-making processes may indicate why individuals act as if they hold common preferences. The article demonstrates that changes in selected allocative outcomes only occur as a result of changes in underlying allocative processes. It further suggests that membership of women’s groups is one effective way of changing intrahousehold decision-making processes and outcomes.