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Sharing Rule Identification for General Collective Consumption Models

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  • Laurens Cherchye

    (CES, University of Leuven)

  • Bram De Rock

    (ECARES and ECORE, Université Libre de Bruxelles)

  • Arthur Lewbel

    ()
    (Boston College)

  • Frederic Vermeulen

    (CentER, Tilburg University)

Abstract

We propose a method to identify bounds (i.e. set identification) on the sharing rule for a general collective household consumption model. Unlike the effects of distribution factors, it is well known that the level of the sharing rule cannot be uniquely identified without strong assumptions on preferences across households of different compositions. Our new results show that, though not point identified without these assumptions, bounds on the sharing rule can still be obtained. We get these bounds by applying revealed preference restrictions implied by the collective model to the household’s continuous aggregate demand functions. We obtain informative bounds even if nothing is known about whether each good is public, private, or assignable within the household, though having such information tightens the bounds. An empirical application demonstrates the practical usefulness of our method.

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Bibliographic Info

Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 809.

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Date of creation: 15 May 2012
Date of revision: 01 Jul 2013
Handle: RePEc:boc:bocoec:809

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Keywords: collective model; consumer demand; revealed preferences; sharing rule; identification; bounds;

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References

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Cited by:
  1. Pierre-André Chiappori & Costas Meghir, 2014. "Intra-household Welfare," NBER Working Papers 20189, National Bureau of Economic Research, Inc.
  2. Colombino Ugo & Narazani Edlira, 2012. "What’s Best for Women: Gender Based Taxation, Wage Subsidies or Basic Income?"," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201212, University of Turin.
  3. Laurens CHERCHYE & Thomas DEMUYNCK & Bram DE ROCK & Frederic VERMEULEN, 2014. "Household consumption when the marriage is stable," Center for Economic Studies - Discussion papers ces14.08, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  4. Pierre-Andre Chiappori & Costas Meghir, 2014. "Intrahousehold Inequality," Cowles Foundation Discussion Papers 1948, Cowles Foundation for Research in Economics, Yale University.
  5. Colombino, Ugo & Narazani, Edlira, 2014. "Closing the Gender Gap: Gender Based Taxation, Wage Subsidies or Basic Income?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201412, University of Turin.
  6. repec:ese:emodwp:em10-13 is not listed on IDEAS

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