Point Estimates of Bargaining Power Using Outside Options

w/ Bradford Barham

We demonstrate a new way to recover point estimates of bargaining power from a collective model of the family with limited commitment. Estimating bargaining power for each family requires that researchers first model each partners' earnings opportunities and predict their incomes in their relevant outside options. This strategy has several distinct advantages over other contemporary measurement options, such as not needing strong assumptions on utility functional forms, distribution factors, or private assignable goods. We use our method to generate the first point estimates of women's power for a majority of the conjugal couples in the Progresa cash transfer experiment. We find that the mother in the median family had 25% of the decision making power that her partner had before the cash transfer program, and 74% after treatment. We find that this empowerment caused a substantial improvement in family diet at both the intensive and extensive margins.

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