Home-based Enterprises: Experimental Evidence on Female Preferences from Pakistan

Enterprises run by women in developing countries are largely home-based and belong to small business networks which may explain these businesses’ small size, low profitability and short life. Using data from Pakistan, we confirm that the majority of female-owned micro-enterprises are home-based and find that these home businesses are likely to close within two years. Our incentivized tasks elicit household preferences for business location and advice taking from women and male decision-makers. Both men and women are willing to sacrifice almost 60% of median profits for running businesses from home. Women avoid taking outside advice, even when it increases task earnings. Women’s preferences are correlated with business experience, but not with agency within the household,mobility and household responsibilities.