By Martin Wolk Executive business editor
msnbc.com

No wonder married couples argue so much about money: They can’t even agree on how much they have. And guess which partner is likely to have a more optimistic view of the family’s finances?

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That's right. Husbands are likely to provide significantly higher values for annual income and net worth, while wives are likely to report higher household debt, according to research based on interviews with nearly 1,200 couples over 35 years.

While money is widely recognized as one of the biggest areas of conflict for couples, surprisingly little research has been done on how perceptions differ between men and women. That is partly because few surveys ask the same questions of husbands and wives separately, said Jay Zagorsky, an economist whose research is published in the latest Journal of Socio-Economics.

Zagorsky analyzed selected data from the massive National Longitudinal Survey, a government-funded study that has interviewed tens of thousands of individuals repeatedly on a variety of topics since the mid-1960s. His results were consistent, whether looking at couples who were nearing retirement age in the mid-1960s or those “young baby boomers” just coming of age in the late 1970s. On average men reported their household income as being 5 percent higher, and their net worth as 10 percent higher, than their wives did when asked separately.

Zagorsky said the results of his study are statistically significant. “It’s pretty clear from the surveys that men and women are not reporting the same numbers,” Zagorsky said in a telephone interview. He cited the case of one man who said his farm was worth $2 million, while his wife valued the farm at $500,000 — a difference that presumably could affect discussions over whether to buy a new tractor.

Differences are not that extreme for most couples, with half providing values that are off by no more than 10 percent. The typical older man in the study reported assets of about $4,700 more than his wife reported, while the typical older woman reported debt of about $500 higher than the figure given by her husband. But 10 percent of the older couples in the study differed by $113,000 or more in reporting net worth. And 10 percent of the “young baby boomers” reported net worth values that differed by 243 percent or more.

Couples tend to come a bit closer when estimating annual household income, with husbands typically providing a figure of $1,000 to $2,500 higher than their wives, said Zagorsky, who is affiliated with Ohio State University’s Center for Human Resource Research. Zagorsky said his findings were consistent with previous research showing that women are less prone to take financial risks than men. And the findings confirmed his own experience as a husband.

“As a wealth researcher I spend a lot of time thinking about money,” he said. “My wife is always telling me we don’t have any money. And I sit down with her and say, no, look, we do. So it was nice to confirm it when I sat down and did the research with all these other couples.”

Zagorsky’s research offers little insight into why men tend to value their income and net worth at a higher level. One factor ruled out was a lack of financial knowledge among women. In one group of 113 younger couples, for example, women reported that they paid the bills more than 60 percent of the time, and their husbands generally agreed with that assessment.

Zagorsky also points out that both men and women typically provide a higher value for their own income and a lower value for their spouses. For example, looking at the same subgroup of 113 younger couples, men reported an average income of about $34,600 (in 1998 dollars), while women reported that their husbands earned $31,000 on average. The women in the study group reported they earned $6,500 on average, while the men reported their wives earned about $3,400.

Zagorsky theorized that men tend to provide higher values for assets and lower values for debts because of their role in household financial decisions.

“I’m going to go out on a limb here,” he said. “The guy is the one going out and buying the car, and being more involved in the negotiations for the house. So they feel they know much more what it’s worth. They’re on the buying end, while the wife is on the paying end.”

Perhaps to the relief of the couples in the study, no attempt was made to “audit” the results by using tax records or other financial documents to determine which partner’s financial assessment was more accurate. Any such assessment could be sensitive given that the couples reported money is either the No. 1 or No. 2 topic of family arguments. (Household chores are the other main point of contention.)

But Zagorsky said the simple fact that women and men have such widely divergent perceptions of their household finances has implications for how households make decisions to spend or save money, and on the accuracy of household financial surveys, which tend to be answered by women.

Zagorsky said the subjects of his research typically had been married longer than the average U.S. couple, meaning that theoretically they should know each other better. “I would expect these couples to know each other much better than the general population,” he said. Presumably couples with less time together would have even more divergent perceptions of their financial situation, he said.

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