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Inter-household Allocations within Extended Family: Evidence from the Indonesia Family Life Survey
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Inter-household Allocations within Extended Family: Evidence from the Indonesia Family Life Survey

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  • Witoelar, Firman

Abstract

This paper uses data from two waves of the Indonesia Family Life Survey (IFLS2-1997 and IFLS3-2000) to investigate whether households that belong to the same extended families pool their income to smooth their consumption. We exploit the fact that the survey also tracks and interviews split-off households during the follow-up surveys, enabling us to construct a panel of extended families. The findings suggest that in contradiction to the null hypothesis of extended-family income pooling, household own income still matters to household consumption even after controlling for extended family resources. The result stands after correcting for potential measurement error and endogeneity of income. More importantly, the findings also suggest that although the change in household own income matters to the change in household consumption, controlling for extended family resources, the magnitudes of the coefficients are small. We also find evidence that household consumption is affected by characteristics of other households in the same extended family.

Suggested Citation

  • Witoelar, Firman, 2005. "Inter-household Allocations within Extended Family: Evidence from the Indonesia Family Life Survey," Center Discussion Papers 28472, Yale University, Economic Growth Center.
    • Handle: RePEc:ags:yaleeg:28472
    DOI: 10.22004/ag.econ.28472
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    Cited by:

    1. Adama BAH, 2013. "Estimating Vulnerability to Poverty using Panel data: Evidence from Indonesia," Working Papers 201325, CERDI.
    2. Kathleen Beegle & Joachim De Weerdt & Stefan Dercon, 2008. "Adult Mortality and Consumption Growth in the Age of HIV/AIDS," Economic Development and Cultural Change, University of Chicago Press, vol. 56(2), pages 299-326, January.
    3. Firman Witoelar, 2013. "Risk Sharing within the Extended Family: Evidence from the Indonesia Family Life Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 62(1), pages 65-94.
    4. Firman Witoelar, 2005. "Inter-household Allocations within Extended Family: Evidence from the Indonesia Family Life Survey," Working Papers 912, Economic Growth Center, Yale University.
    5. Adama Bah, 2015. "Estimating Vulnerability to Poverty using Panel data: Evidence from Indonesia," CERDI Working papers halshs-00936199, HAL.
    6. Park, Cheolsung, 2006. "Risk Pooling between Households and Risk-Coping Measures in Developing Countries: Evidence from Rural Bangladesh," Economic Development and Cultural Change, University of Chicago Press, vol. 54(2), pages 423-457, January.
    7. Vial, Virginie & Hanoteau, Julien, 2015. "Returns to Micro-Entrepreneurship in an Emerging Economy: A Quantile Study of Entrepreneurial Indonesian Households’ Welfare," World Development, Elsevier, vol. 74(C), pages 142-157.
    8. Kathleen Beegle & Joachim De Weerdt & Stefan Dercon, 2008. "Adult Mortality and Consumption Growth in the Age of HIV/AIDS," Economic Development and Cultural Change, University of Chicago Press, vol. 56, pages 299-326.

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    More about this item

    Keywords

    Consumer/Household Economics;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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