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Sharing Rule Identification for General Collective Consumption Models

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  • Cherchye, L.J.H.
  • Rock, B. de
  • Lewbel, A.
  • Vermeulen, F.M.P.

    (Tilburg University, Center for Economic Research)

Abstract

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 Tilburg University, Center for Economic Research in its series Discussion Paper with number 2012-041.

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Date of creation: 2012
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Handle: RePEc:dgr:kubcen:2012041

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Web page: http://center.uvt.nl

Related research

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

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References

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Cited by:
  1. Colombino, Ugo & Narazani, Edlira, 2012. "What's Best for Women: Gender Based Taxation, Wage Subsidies or Basic Income?," IZA Discussion Papers 6828, Institute for the Study of Labor (IZA).
  2. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Frederic Vermeulen, 2014. "Household Consumption When the Marriage is Stable," Working Papers ECARES ECARES 2014-21, ULB -- Universite Libre de Bruxelles.
  3. Pierre-André Chiappori & Costas Meghir, 2014. "Intrahousehold Inequality," NBER Working Papers 20191, National Bureau of Economic Research, Inc.
  4. repec:ese:emodwp:em10-13 is not listed on IDEAS
  5. Pierre-André Chiappori & Costas Meghir, 2014. "Intra-household Welfare," NBER Working Papers 20189, National Bureau of Economic Research, Inc.
  6. 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.

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