ORIGINAL PAPER Household Decision-Making and Expenditure Patterns of Married Men and Women in Malaysia Selamah Abdullah Yusof • Jarita Duasa Published online: 4 May 2010 Ó Springer Science+Business Media, LLC 2010 Abstract This study tests two opposing models of household behavior, the income pooling hypothesis and the bargaining model, by examining the final decision-making and expenditure patterns of married men and women in Malaysia. The data used is from the responses of 1,778 married persons obtained from a survey of employed Malaysians. The results show that women are often the final decision-makers on everyday household expenditures while men make the final decisions on large household expenditures, but both men and women practice autonomy in decisions related to financial investments. In spending, variations are observed between men and women in their level and proportion of expenditure of certain categories of goods and services. Relative earning share is a significant factor in decision making as well as consumption expen- diture. These results tend to support the bargaining model of household decision-making. Keywords Bargaining model Á Decision-making Á Expenditure Á Household Á Malaysia Introduction There are two main approaches in modeling household decision-making process which differ with regards to whether the sources of income should affect patterns of expenditure (Phipps and Burton 1998). The household utility function framework assumes that a family maxi- mizes a single household utility function reached by a consensus among family members subject to a pooled resource constraint. It does not differentiate between indi- vidual family members, nor does it recognize any sys- tematic differences in power relations among household members (Becker 1974, 1981; Samuelson 1956). The implication of this model is that the outcome and the decision-maker are independent of who earns the income in the household. There should be no relationship between participation in decision-making process and relative share of income (Bernasek and Bajtelsmit 2002). On the other hand, bargaining models incorporate divergent and conflicting preferences of individual family members into the analysis. Papers such as Lundberg et al. (1997), Phipps and Burton (1998) and Bernasek and Bajtelsmit (2002) discuss variations of the bargaining models that have been developed by various researchers such as Manser and Brown (1980), McElroy and Horney (1981) Lundberg and Pollak (1993) and Kanbur and Had- dad (1994), among others. Relative access to income, education and paid work outside the home are expected to increase the bargaining power of a household member which leads to a greater participation in the decision- making process (Jianakoplos and Bernasek 2008). Considerable research has been conducted to test the two opposing models by examining the influence of spouse in decision-making process. The findings of some studies support the bargaining models as it is shown that changes in economic features of a household lead to transforma- tions in decision-making patterns and consumption behaviors and outcomes. The contribution to the household income influences the level of control and power in making financial decisions of the household, in particular for the wife (see for example, Lee and Beatty 2002; Burgoyne and S. Abdullah Yusof (&) Á J. Duasa Department of Economics, International Islamic University Malaysia, Jalan Gombak, 53100 Kuala Lumpur, Malaysia e-mail: selamah@iiu.edu.my J. Duasa e-mail: jarita@iiu.edu.my 123 J Fam Econ Iss (2010) 31:371–381 DOI 10.1007/s10834-010-9200-9