Gender-Bias in India: The Importance of Household Fixed-Effects

This paper presents an analysis of gender patterns in intra-household allocation of resources based on household-level consumption data. Invoking the assumption that households seek to equalize the marginal utility of wealth when they allocate resources over the life-cycle, the paper provides a rationale for parental behaviour pertaining to the intertemporal allocation of goods among children. Estimation results based on panel data from India show that controlling for the unobserved marginal utility (household-fixed) effect is crucial. Once allowance is made for fixed effects, the results indicate that there is no longer any gender-differential in the allocation of resources.