To invest or not to invest in sanitation: the role of intra-household gender differences in perceptions and bargaining power

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We exploit novel data collected within a randomised controlled trial of a sanitation microcredit intervention to study how intra-household gender differences in perceptions of costs and benefits of sanitation impact investment decisions. We show that – as long as the wife is involved in household decision-making – the intra-household differences in perceptions we document influence borrowing and investments: uptake of the sanitation loan is higher among households where the wife has higher benefit perception, whereas successful conversion to a toilet depends on differences in monetary cost perceptions. The estimated effects are consistent with the predictions of a model of intra-household decision-making.