Bargaining or efficiency within the household? The case of Italy

Two aspects play a role in the household decision-making, the efficiency and the bargaining power’s argument. The crucial difference between the two approaches is the expected influence of personal and partners’ wage. To investigate which of the two models hold, in the Italian context, we estimate an ordered probit model for four aspects of household decision-making. We use It-Silc 2010 as it provides a module on intra-household sharing of resources. Results show that in strategic control decisions, where the power argument should dominate the efficiency approach (i.e. decisions on durable goods, savings and other important decisions) the spouse/partner with higher wage is the household decision maker. For decision regarding executive management (i.e. decision on everyday shopping) the efficiency argument holds. Key Words financial management, intra-household bargaining, household production, gender differences; intra-household decision power; family economics; JEL J12 D13 E21 G11