Final answer:
Money viewed as "made to be shared with family" suggests a collective use of resources that benefits the group but may conflict with individual preferences. Family dynamics and control over finances affect spending decisions, with outcomes that could differ from basic economic models assuming homogeneous family preferences.
Step-by-step explanation:
When money is considered "made to be shared with family," it implies that family resources are pooled together for collective well-being rather than individual gain. This can be beneficial for the group, such as when financial decisions prioritize health and child care over personal indulgences like alcohol and tobacco, leading to improved children’s health. However, this notion might be detrimental to the individual if the collective decision-making does not align with their personal preferences or financial goals. For instance, if one’s personal desire for savings or investment is overridden by the family’s immediate consumption needs.
Understanding the dynamics of how family members share and control money is crucial. If resources are distributed unequally within a family, it affects consumption patterns and overall family utility. For example, when mothers control a larger share of family income, expenditures often align more with child well-being and health, rather than individual adult indulgences. This is insightful for policies aimed to assist families, suggesting that who controls the finances is as important as the amount of money provided.
While some economic models assume that family members have homogeneous preferences and that any member receiving money would benefit the family equally, in practice, this is rarely the case. Individuals within a family have varied preferences and control over money, which can lead to different outcomes in terms of family consumption and individual well-being.