Intra-household allocation with shared expenditure choices: experimental evidence from Filipino migrants

Abstract

Sharing information concerning expenditure choices between a migrant and the recipient affects the migrant’s allocation patterns. In a lab-in-the-field experiment, Filipino migrants are asked to earmark an in-kind budget to be delivered to their most closely connected household (MCCH). When the MCCH is fully aware of the migrant’s decisions (i.e., symmetric information), we observe that the migrant raises the portion for consumption goods in the range of 10.0–10.5% with respect to the case when the migrant’s choices are not disclosed (i.e., asymmetric information). Moreover, when sharing information, the migrant relies on more involvement of the recipient household and lowers by 7–9% the allocation to expenses she could monitor ex-post more strictly. The former result is consistent with the signaling motive, whereas the latter supports the presence of strategic behavior by the migrant remitter. Education allocations are significantly higher in intra- rather than inter-household transfers and this provides insights for conditional cash transfer policies.