CREB - Center for Research in Economics and Business

Pressures from Peers and Spouses and Self-control Problems as Constraints to Microenterprise Growth: Experimental Evidence from Pakistan

Project members:
Uzma Afzal, University of Nottingham,
Giovanna d'Adda, University of Milan,
Marcel Fafchamps, Stanford University and
Farah Said, Lahore School of Economics and

This research is funded by the International Growth Centre (IGC). We conduct lab experiments to investigate demand for consumption agency in married couples from Pakistan. Most subjects are no better at guessing their spouse's preferences than those of a stranger, suggesting that individual executive agency has instrumental value. We find significant evidence of demand for agency in all experiments, varying with the cost and anticipated instrumental bene t of agency. But subjects often make choices incompatible with pure instrumental motives e.g., paying for agency when knowing their partner assigned them their preferred choice. Female subjects are willing to exert agency even when they have little executive agency within their household. (Published in American Economic Journal: Applied Economics (Forthcoming): https://www.aeaweb.org/articles?id=10.1257/app.20200672&from=f and working paper and article available here: https://www.nber.org/papers/w24977;https://voxeu.org/article/demand-power-and-control-household-consumption-decisions)