Household agreement and financial satisfaction: a bargaining perspective

Blake Thomas Gray, Yi Liu, Sarah Del Asebedo

Research output: Contribution to journalArticlepeer-review

Abstract

This study investigates the relationship between married individuals’ financial satisfaction and their agreement about the investment of household savings and major life issues. Couples are categorized into two groups: (1) those who agree to share decision-making or assign a primary decision maker and (2) those who disagree. We then test for differences in individual financial satisfaction by female-headed, male-headed, equally shared and households in disagreement. Successful bargaining is expected to result in households that agree on a decision-making arrangement that maximizes financial satisfaction. The results suggest that spouses who agree on a decision-making arrangement when investing in household savings or making major life decisions are more likely to report higher levels of financial satisfaction than those who do not. These results align with the theory that states cooperative bargaining agreements result in higher utility than non-cooperating bargaining agreements.

Original languageEnglish
JournalApplied Economics Letters
DOIs
StateAccepted/In press - 2020

Keywords

  • Financial satisfaction
  • cooperative bargaining
  • decision making
  • household agreement

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