Share and Share Alike: The Impact of Rainfall on Gendered Income Allocation in Malawi

Studies of intra-household resource allocation have typically omitted income earned jointly, by two or more individuals. To explore this important dynamic, I empirically test the assumption that all household income is pooled, when joint income, as well as income earned individually by men and women, is accounted for in the analysis. I develop a collective intra-household model which explicitly includes joint and individual relationships to explain income allocation. Exogenous variation in rainfall is used to examine if households pool resources and insure one another against income shocks, resulting from these rainfall shifts. I reject the hypothesis of complete income pooling and full insurance within the household. However, I find evidence that households members pool income and insure one another for expenditures on essential goods. Conversely, they do not pool income and do not insure one another for luxury goods. I conclude that there is strategic income pooling behavior with respect to particular types of expenditure. These results are contrary to previous studies, which fail to find even partial insurance for essential goods within households. The conclusions of this study provide a novel perspective on intra-household dynamics which highlight the need to consider joint relationships in household analyses. Acknowledgement :