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Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power

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Author Info
Martin Browning (Institute of Economics, University of Copenhagen)
Pierre-AndrŽe Chiappori (Department of Economics, University of Chicago)
Arthur Lewbel () (Boston College)

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Abstract

How much income would a woman living alone require to attain the same standard of living that she would have if she were married? What percentage of a married couple's expenditures are controlled by the husband? How much money does a couple save on consumption goods by living together versus living apart? We propose and estimate a collective model of household behavior that permits identification and estimation of concepts such as these. We model households in terms of the utility functions of its members, a bargaining or social welfare function, and a consumption technology function. We demonstrate generic nonparametric identification of the model, and hence of a version of adult equivalence scales that we call "indifference scales," as well as consumption economies of scale, the household's resource sharing rule or members' bargaining power, and other related concepts.

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Publisher Info
Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 588.

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Length: 47 pages
Date of creation: 13 Jan 2004
Date of revision: 04 Sep 2006
Handle: RePEc:boc:bocoec:588

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Related research
Keywords: Consumer Demand; Collective Model; Adult Equivalence Scales; Household Bargaining; Economies of Scale; Demand Systems; Bargaining Power; Barten Scales.;

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Find related papers by JEL classification:
D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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  13. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February. [Downloadable!] (restricted)
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  14. Bourguignon, F. & Browning, M. & Chiappori, P. A., 1995. "The Collective Approach to Household Behaviour," DELTA Working Papers 95-04, DELTA (Ecole normale supérieure).
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