ALTRUISM, COOPERATION, AND EFFICIENCY: AGRICULTURAL PRODUCTION IN POLYGYNOUS HOUSEHOLDS

Joyce Chen (Ohio State), Richard Akresh (Illinois-Urbana), Charity Moore (Ohio State)

Efficiency in the Household

Households have many features that encourage cooperation and the efficient allocation of resources Altruism/shared public goods Repeated interaction Better information

And, yet, there is ample evidence of inefficiency, in

both consumption and production Udry (1996), Goldstein and Udry (2008) Duflo and Udry (2004), Dubois and Ligon (2010)

Inefficiency in the Household

Common culprits of inefficiency include Imperfect monitoring Limited commitment/enforcement Social norms Separate spheres

Perhaps altruistic preferences themselves can inhibit

cooperation and efficiency Lead to higher utility in a non-cooperative equilibrium Make threats of punishment less credible

Altruism and Exchange

Bernheim and Stark (1988) first suggested, in a theory paper, that altruism can inhibit cooperation by reducing the credibility of punishments

Empirical studies typically compare relationships

between family and non-family members, making it difficult to distinguish altruism from information, etc.

We look at relationships with differing degrees of

altruism, within the same family

Outline

Context and Data A Simple Game-Theoretic Model Main Results Robustness and Extensions

Context: Burkina Faso

Data are drawn from the 1984-85 ICRISAT Survey

Married Burkinabé women often have access to private plots under their own control

But they also must provide labor on household

communal plots, usually at discretion of the head

Husbands typically provide staple foods and contribute to medical expenses and school fees

Table 1. Average Yield and Plot AreaMonogamous

Household Wife of Other OtherHead Head Male Female

Yield (1000 FCFA) 126.29 49.15 142.93 124.82(651.6) (267.0) (498.2) (434.7)

Area (Hectare) 0.748 0.075 0.318 0.069(1.24) (0.13) (0.54) (0.12)

Observations 743 425 172 319Polygynous

Household Wife of Other OtherHead Head Male Female

Yield (1000 FCFA) 85.47 59.50 145.51 71.57(341.3) (208.4) (358.6) (250.6)

Area (Hectare) 0.756 0.099 0.385 0.074(1.14) (0.14) (0.48) (0.10)

Observations 1156 1305 407 699

Context: Burkina Faso

Polygyny is quite common in our data (51%) Most of these households (56%) have just two wives One-third have three wives, 11% have more

Although interaction between co-wives is often characterized by conflict, there is also a fair amount of cooperation for pragmatic goals Labor-sharing Exchange of goods and/or services

Altruism and Cooperation

Consider a household with three individuals – one husband and two wives

Each player engages in agricultural production on his/her own plot, using the same technology

But different plot characteristics mean the optimal labor allocation differs across plots as well

Altruism and Cooperation

Husbands and wives care about each other’s consumption of certain goods “Separate spheres”– otherwise, production and

consumption decisions are separable Consistent with anthropology of Burkinabé households

Co-wives have no altruistic linkage

Each individual can choose to coordinate production

(i.e., share labor) with other household members

The Basic Game

With altruism, there will be some exchange between spouses, even without explicit cooperation, but not between co-wives

The gains to cooperation can be higher for co-

wives, even if aggregate production is not

Lack of altruism allows co-wives greater scope for punishment, while altruism makes the husband’s punishment susceptible to renegotiation

Altruism and Efficiency

Results are sensitive to separate spheres assumption Consistent with Burkinabé households Not an uncommon formulation of altruism to have

preferences over a good that one does not directly control (e.g., children’s education, utility of spouse)

Cooperation implies efficient allocation of inputs across plots controlled by cooperating parties Controlling for land quality, crop choice and time-

varying shocks, plot yields should be equalized

Empirical Application

Estimate yields as a function of plot characteristics (size, toposequence, soil type, location) and cultivator characteristics

Include household-crop-year fixed effects (λ)

Allow cultivator characteristics to vary with conjugal status (monogamous/polygynous)

𝑄𝑄ℎ𝑡𝑡𝑡𝑡𝑡𝑡 = 𝑿𝑿ℎ𝑡𝑡𝑡𝑡𝑡𝑡 𝛽𝛽 + 𝛾𝛾𝐺𝐺𝐺𝐺ℎ𝑡𝑡𝑡𝑡𝑡𝑡 + 𝛾𝛾𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂ℎ𝑡𝑡𝑡𝑡𝑡𝑡 + 𝛾𝛾𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂ℎ𝑡𝑡𝑡𝑡𝑡𝑡 + 𝜆𝜆ℎ𝑡𝑡𝑡𝑡 + 𝜀𝜀ℎ𝑡𝑡𝑡𝑡𝑡𝑡

where 𝛾𝛾𝑘𝑘 = 𝛾𝛾𝑘𝑘0 + (𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃ℎ𝑡𝑡 ∗ 𝛾𝛾𝑘𝑘𝑃𝑃) for k = G, OM, OF

Empirical Application

If cooperation is greater among co-wives, should observe smaller negative effect of gender in polygynous households

If polygyny also provides husbands with more opportunities for cooperation, then we should observe a smaller gap between heads and other male cultivators as well

𝛾𝛾𝑂𝑂𝑂𝑂𝑃𝑃 ≥ 0

Alternate Explanations

Household head can enforce cooperative arrangements between players other than himself – also implies smaller yield differences between other cultivators than between husbands and wives

Strong preferences (lower costs) for cooperation among women – also implies smaller differences between females in polygynous households

𝛾𝛾𝑂𝑂𝑂𝑂 < 𝛾𝛾𝑂𝑂𝑂𝑂

𝛾𝛾𝑂𝑂𝑂𝑂𝑃𝑃 > 0

Table 2. Fixed Effects Estimates of theEffect of Cultivator Characteristics on Plot Yield

OtherMen Only Cultivators Women Only

(I) (II) (III) (IV)Gender (1=female) -202.21 *** -160.72 ***

(34.14) (54.01)Other Male -97.18 ** -74.78 **

(39.38) (36.06)Other Female -31.96 18.16

(31.39) (20.77)Gender*Polygynous 168.94 *** 131.04 **

(40.09) (61.80)Other Male*Poly 86.50 * 69.99 *

(45.82) (42.05)Other Female*Poly 28.71 -18.87

(35.81) (23.23)Observations 5230 2478 1597 2748

Main Results

Estimates consistent with altruism– co-wives more likely to cooperate with each other than with husband Husbands do not do as well under polygyny, relative to

other male cultivators – evidence of transaction costs

No clear evidence for alternate explanations Gap between other males and other females is not

significantly smaller No significant gap between wives and other women

Table 3. Alternate TestsGender (1=female) -63.60 Gender (1=female) -45.46

(66.14) (50.68)Gender*Other Female -132.29 * Gender*No. of Kids -23.28 **

(78.33) (10.27)Gender*Poly 33.67 Gender*Poly 41.94

(75.20) (64.85)Gender*Poly*OF 126.61 Gender*Poly*Kids 22.15 *

(88.86) (11.62)Observations 3629 Observations 4701

If females have stronger preferences for cooperation, addition of other female cultivator should increase efficiency among women

Cooperation should be decreasing in the degree of altruism (# of shared goods) between players

Robustness Checks

Fixed effects control for factors that are fixed across individuals planting the same crop, in the same year, within the same household

But they do not control for differences in crop choice or preferences for cooperation across monogamous and polygynous households Main results include full set of interactions with

polygyny to allow for different technologies

Table 4. Robustness Checks, Fixed Effects EstimatesPolygynous Polygynous Household-

=2 Wives >2 Wives Year FEb

(I) (II) (V)Gender (1=female) -155.14 *** -155.14 *** -81.52 ***

(40.11) (39.01) (23.50)Other Male -56.35 -56.35 -29.70

(47.21) (45.91) (29.82)Other Female -16.02 -16.02 0.97

(36.50) (35.49) (26.27)Gender*Polygynous 136.33 ** 154.32 *** 76.40 ***

(53.59) (53.01) (28.36)Other Male*Poly 72.42 45.40 29.62

(62.19) (62.09) (35.80)Other Female*Poly 14.76 13.91 -8.50

(48.07) (44.86) (30.85)Observations 3112 3142 5230

Unobserved Land Quality

Fallow decisions can provide some indication of land quality

Omitting observed land quality measures can reveal the direction of bias, if correlation between observed and unobserved characteristics is known

Data for 1981-83 only included co-wives’ plots for cotton, cereal and root crops

Table 5. Checks for Unobserved Land QualityYears Since No Plot 1981-83

Fallow Chars. Only(I) (II) (III)

Gender (1=female) -6.73 *** -125.67 *** -35.13 ***(2.20) (31.15) (12.48)

Other Male -9.48 ** -8.52 -30.30 **(3.99) (36.98) (12.58)

Other Female 2.73 -3.58 2.74(2.14) (31.80) (15.60)

Gender*Polygynous 1.31 128.65 *** 1.66(2.32) (35.90) (14.88)

Other Male*Poly 2.34 21.09 17.15(4.03) (43.12) (15.25)

Other Female*Poly -3.21 6.01 -23.77(2.33) (36.33) (18.53)

Observations 4356 5230 4198

Unobserved Heterogeneity

While greater efficiency among wives seems clear, proximate cause is not yet clear No evidence of greater cooperation among husbands

and wives, contract enforcement by head or greater propensity for cooperation among women

But polygyny may require the head to contribute more time to administrative tasks

Or, polygynous men may have a different level of

underlying productivity

Table 6. Fixed Effects Estimates of the Effect ofCultivator Characteristcs on Plot Yield, by Household Structure

Verticala Horizontalb

(I) (II)Gender (1=female) -8.43 -516.33 ***

(21.02) (111.29)Other Male -18.55 -237.79 **

(25.80) (109.52)Other Female -22.94 -5.00

(20.73) (74.17)Gender*Polygynous -9.68 518.79 ***

(26.50) (117.88)Other Male*Poly 8.06 251.77 **

(34.52) (116.05)Other Female*Poly 20.62 2.30

(27.05) (78.45)Observations 2878 1823

Table 7. Household Fixed Effects Specification

Gender (1=female) -99.54 ***(26.25)

Other Male -32.28 Implied Fixed Effect(31.46) Switch to Poly -30.98

Other Female 7.914 (49.66)(27.03) Always Polygynous -67.78 ***

Polygynous -82.87 (20.49)(83.71) Total Hh Plot Area 7.790 ***

Gender*Poly 65.37 ** (2.752)(30.21) Capital Intensity 30.21

Other Male*Poly 12.21 (37.21)(37.27) Observations 120

Other Female*Poly -15.13(31.65)

Observations 5230

Unobserved Heterogeneity

Cooperation is likely more difficult in horizontal households, given varying family allegiances Polygyny, by providing more opportunities for mutual

benefit, has a greater positive effect on efficiency Not consistent with greater demands on time for

polygynous household heads

Differences between polygynous household heads and other male cultivators seem to arise over time, rather than being intrinsic

Dynamic Inefficiency

Greater cooperation may make investments in large capital goods more cost-effective

Wealthier households are more likely to make such

investments, but wives have found to be a substitute for investment in durable assets Look at expenditure on large capital goods as a

percentage of total expenditure on farm inputs Treat polygyny and household wealth (total area under

cultivation) as endogenous

Dynamic Inefficiency

Instruments include: Ethnic group of the household – polygyny based in

ethno-cultural traditions, while farming practices are similar across ethnic groups

Area of land inherited – land for permanent cultivation, reflects relative position in lineage, unobserved skill

Also include village-year fixed effects to account for aggregate shocks and differences in agro-climatic zones

Table 8. Percentage of Input Purchases in Large Capital Goods, IV EstimatesFirst Stage Polygyny Total Area

Polygynous 0.592 *** Dagari-Djula 0.708 *** 0.841(0.209) (0.190) (1.172)

Total Hh Plot Area 0.008 Bwa 0.201 4.140 ***(0.017) (0.147) (0.909)

Observations 231 Other Ethnic Group 0.096 0.648(0.195) (1.208)

Sargan Test 0.27 Inherited Area 0.004 0.260 ***(p-value) (0.87) (0.008) (0.050)

Dynamic Inefficiency

Polygynous households invest more, proportionally, in large capital equipment Without cooperation, lumpy investments should lead to

greater divergence in yields

They seem to have more labor and more capital Perhaps monogamous households use more chemicals

and/or improved seed varieties Need to estimate production function to fully

understand the implications for income and growth

Conclusions

In polygynous households, co-wives cooperate more with each other, at the expense of husbands Difference between heads’ and wives’ yields is smaller,

as is the difference between heads and other males

Some evidence of head acting as an enforcement mechanism, but only in certain contexts

Some evidence of greater cooperation among all

women, but relationship matters

Conclusions

Results do not seem to be explained by Differing preferences for cooperation Endogenous crop choice Unobserved plot quality Differing demands on the household head Self-selection into polygyny

Although polygynous households are a very specific

case, there are many cases of 3+ player games in which there are differing degrees of altruism