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Families as Roommates: Changes in U.S. Household Size from 1850 to 2000

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  • Alejandrina Salcedo
  • Todd Schoellman
  • Michèle Tertilt

Abstract

The size of the average American household has fallen dramatically -from six in 1850 to three in 2000. To explain this decline we model households as collections of roommates who share the costs of household public goods. If private goods are more income elastic than public goods, as we document in the paper, an increase in income endogenously leads to smaller households. We calibrate the model to match data from 2000. Changing incomes to their 1850 levels, we find that our mechanism can explain 37 percent of the observed reduction in the number of adults per household and 16 percent of the reduction in the number of children.

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File URL: http://www.banxico.org.mx/publicaciones-y-discursos/publicaciones/documentos-de-investigacion/banxico/%7BEA68D592-2D2E-7169-B722-4650F0F63532%7D.pdf
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Bibliographic Info

Paper provided by Banco de México in its series Working Papers with number 2010-07.

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Date of creation: Jun 2010
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Handle: RePEc:bdm:wpaper:2010-07

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Web page: http://www.banxico.org.mx
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Keywords: Household size; living arrangements; roommates; economies of scale; household public goods; fertility decline.;

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Cited by:
  1. Fatih Guvenen & Michelle Rendall, 2013. "Women's emancipation through education: a macroeconomic analysis," Working Papers 704, Federal Reserve Bank of Minneapolis.
  2. Bick, Alexander & Choi, Sekyu, 2013. "Revisiting the effect of household size on consumption over the life-cycle," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2998-3011.
  3. Thaiyoong Penny Mok & Gillis Maclean & Paul Dalziel, 2011. "Household Size Economies: Malaysian Evidence," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 41(2), pages 203-223, September.
  4. Anders Fremstad, 2014. "Gains from Sharing: Sticky Norms, Endogenous Preferences, and the Economics of Shareable Goods," UMASS Amherst Economics Working Papers 2014-02, University of Massachusetts Amherst, Department of Economics.

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