Working Paper BETA #2012-10

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Title : Do husbands and wives pool their incomes? Experimental evidence.

Author(s) : Miriam Beblo, Denis Beninger

Abstract : In this paper, we propose a direct test of income pooling within couples, which yields new insight into intra-household bargaining behaviour. For this purpose, we performed a five-round experiment with 95 real, established couples in Germany. In each round, the couples received the same amount of money, though with differing allocations between the spouses, to make consumption choices for private goods. We observed the choices to depend strongly on the spouses’ relative resources for about half the sample and interpret this as a rejection of the income pooling hypothesis. Moreover, non-pooling was positively related with the homogeneity of the spouses’ characteristics (in terms of age, education, working hours) and negatively with their average education and income levels.

Key-words : Intra-household allocation, Consumption choices, Couple Experiment.

JEL Classification : C71, C91, C92, D13.