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Neoclassical and collective rationality in household labour supply

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  • Jonathan Seaton

Abstract

The Neoclassical treatment of household labour supply assumes household members possess identical preferences. Models have emerged which assume separate utility functions for household members where the solution to resource allocation is derived from non-cooperative or bargaining games. It can be argued that bargaining implies Pareto efficient resources allocation and that non-cooperation is inefficient in the same sense that if individuals cooperated at least one member could become better off without making anyone else worse off. In this paper a revealed preference non-parametric test, first envisaged by Chiappori (1988), is explained, generalized and implemented. This test determines whether data support the hypothesis that householders bargain to a Pareto efficient outcome or not.

Suggested Citation

  • Jonathan Seaton, 1997. "Neoclassical and collective rationality in household labour supply," Applied Economics Letters, Taylor & Francis Journals, vol. 4(8), pages 529-533.
  • Handle: RePEc:taf:apeclt:v:4:y:1997:i:8:p:529-533
    DOI: 10.1080/758536640
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    Cited by:

    1. Connie Bayudan, 2006. "Wives' time allocation and intrahousehold power: evidence from the Philippines," Applied Economics, Taylor & Francis Journals, vol. 38(7), pages 789-804.
    2. Chiappori, Pierre-André & Donni, Olivier, 2006. "Les modèles non unitaires de comportement du ménage : un survol de la littérature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 82(1), pages 9-52, mars-juin.
    3. Connie Bayudan, 2006. "Portfolio decomposition and intrahousehold environments: evidence from Bangladesh," Applied Economics Letters, Taylor & Francis Journals, vol. 13(3), pages 147-152.
    4. Jonathan Seaton, 2009. "A nonparametric revealed preference test of optimal intra-firm resource allocation," Applied Economics, Taylor & Francis Journals, vol. 41(27), pages 3463-3476.
    5. Donni, Olivier & Molina, José Alberto, 2018. "Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence," IZA Discussion Papers 11915, Institute of Labor Economics (IZA).
    6. Chiappori, Pierre-André & Donni, Olivier, 2009. "Non-unitary Models of Household Behavior: A Survey of the Literature," IZA Discussion Papers 4603, Institute of Labor Economics (IZA).

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