Decision-making in credit access and household welfare: a gender perspective

Abstract

Credit can improve household welfare by enabling investment in productivity-enhancing activities, smoothing consumption, and diversifying income sources, but the extent of these benefits depends on who controls credit-related decisions. This study investigates the impact of decision-making in credit access on household welfare, addressing the gap that overlooks who makes credit-related decisions. We consider three decision-making patterns in credit access: male dominance, female dominance, and joint decision-making, offering new insights into how intra-household dynamics shape income and expenditure outcomes. Using household survey data from rural China, we apply a multivalued treatment effects model to address selection bias. Our analysis reveals that rural households with joint decision-making and male dominance in credit access achieve higher agricultural income, lower food expenditure, and higher non-food expenditure than those with female dominance. Households with male dominance in credit access tend to have significantly lower household income, non-agricultural income, and food expenditure than those with joint decision-making. These findings offer new insights into decision-making in credit access and highlight intra-household bargaining as a channel linking credit decisions to welfare outcomes