American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Good Wife? Reputation Dynamics and Financial Decision-Making inside the Household
American Economic Review
vol. 115,
no. 2, February 2025
(pp. 525–70)
Abstract
We study reputation dynamics within the household in a setting where women regularly receive transfers from their husbands for household purchases. We propose a signaling model in which wives try to maintain a good reputation in the eyes of their husbands to receive high transfers. This leads them to (i) avoid risky purchases (goods with unknown returns) and (ii) knowingly overuse low-return goods to hide bad purchase decisions—we call this the intrahousehold sunk cost effect. We present supportive evidence for the model from a series of experiments with married couples in rural Malawi.Citation
Buchmann, Nina, Pascaline Dupas, and Roberta Ziparo. 2025. "The Good Wife? Reputation Dynamics and Financial Decision-Making inside the Household." American Economic Review, 115 (2): 525–70. DOI: 10.1257/aer.20230393Additional Materials
JEL Classification
- D13 Household Production and Intrahousehold Allocation
- D82 Asymmetric and Private Information; Mechanism Design
- J12 Marriage; Marital Dissolution; Family Structure; Domestic Abuse
- J16 Economics of Gender; Non-labor Discrimination
- O12 Microeconomic Analyses of Economic Development
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure