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This paper is intended to bridge the theoretical literature describing efficient intra-household behaviour and the development literature that collects empirical regularities pointing toward the existence of strategic decision-making among spouses.
It examines the key elements of the collective model and discusses its relevance to analysing intra-household behaviour in poor countries. It explores the role that risk and uncertainty, information asymmetries, power imbalances, arranged marriages, strategic investment, gender norms, and extended households play in the attainment of efficiency.
Maternal mortality remains very high in many parts of the developing world, especially in sub-Saharan Africa. While maternal deaths are observable, it may not be straightforward for individuals to learn about risk factors. This paper utilizes novel data on male and female perceptions of maternal risk in Zambia to document that superstitions about causes of maternal mortality are pervasive and to uncover evidence that such beliefs impede learning about maternal health risk levels and correlates. In our data, people who hold traditional beliefs disregard past birth complications completely in assessing future risk, unlike those who hold modern beliefs.
In the absence of well-developed markets for credit and insurance, extended families play a major role as a traditional system of mutual help. However these arrangements have important consequences on economic choices. In this paper, we use first hand data from Western Cameroon to explore this question. We find that the large majority of transfers follow a given pattern whereby elder siblings support their younger siblings in the early stages of their lives who in turn reciprocate by supporting their elder siblings when they have children. We interpret this pattern as a generalised system of reciprocal credit within the extended family. We propose a simple overlapping generation model to investigate its welfare properties. We then explore the implications of this pattern on labour market outcomes and find evidence of large disincentive effects. This pattern of transfers also implies that younger siblings are more educated but have fewer and less educated children.