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Distributional effects in household models: separate spheres and income pooling

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  • Martin Browning

    () (Institute for Fiscal Studies and Nuffield College, Oxford)

  • Pierre André Chiappori

    (Institute for Fiscal Studies and Columbia University)

  • Valérie Lechene

    (Institute for Fiscal Studies and University College London)

Abstract

We derive distributional effects for a non-cooperative alternative to the unitary model of household behaviour. We consider the Nash equilibria of a voluntary contributions to public goods game. Our main result is that, in general, the two partners either choose to contribute to di¤erent public goods or they contribute to at most one common good. The former case corresponds to the separate spheres case of Lundberg and Pollak (1993). The second outcome yields (local) income pooling. A household will be in different regimes depending on the distribution of income within the household. Any bargaining model with this non-cooperative case as a breakdown point will inherit the local income pooling. We conclude that targeting benefits such as child benefits to one household member may not always have an effect on outcomes.

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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W07/03.

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Length: 13 pp.
Date of creation: Jan 2007
Date of revision:
Handle: RePEc:ifs:ifsewp:07/03

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  1. Valerie Lechene & Ian Preston, 2005. "Household Nash Equilibrium with Voluntarily Contributed Public Goods," Economics Series Working Papers 226, University of Oxford, Department of Economics.
  2. Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Discussion Papers in Economics at the University of Washington 91-08, Department of Economics at the University of Washington.
  3. Pierre-André Chiappori & Richard Blundell & Costas Meghir, 2002. "Collective labour supply with children," IFS Working Papers W02/08, Institute for Fiscal Studies.
  4. Kemp, Murray C., 1984. "A note of the theory of international transfers," Economics Letters, Elsevier, vol. 14(2-3), pages 259-262.
  5. Lundberg, S.J. & Pollak, R.A. & Wales, T.J., 1994. "Do Husbands and Wives Pool Their Resources? Evidence from U.K. Child Benefit," Working Papers 94-6, University of Washington, Department of Economics.
  6. Warr, Peter G., 1983. "The private provision of a public good is independent of the distribution of income," Economics Letters, Elsevier, vol. 13(2-3), pages 207-211.
  7. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
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Citations

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Cited by:
  1. d’ASPREMONT, Claude & DOS SANTOS FERREIRA, Rodolphe, 2009. "Household behavior and individual autonomy," CORE Discussion Papers 2009022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Jens Bonke & Hans Uldall-Poulsen, 2007. "Why do families actually pool their income? Evidence from Denmark," Review of Economics of the Household, Springer, vol. 5(2), pages 113-128, June.
  3. Melanie Lührmann & Jürgen Maurer, 2007. "Who wears the trousers? A semiparametric analysis of decision power in couples," CeMMAP working papers CWP25/07, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  4. Valérie Lechene & Ian Preston, 2008. "Non cooperative household demand," IFS Working Papers W08/14, Institute for Fiscal Studies.
  5. Cherchye, L.J.H. & Demuynck, T. & Rock, B. de, 2009. "Degrees of Cooperation in Household Consumption Models: A Revealed Preference Analysis," Discussion Paper 2009-91, Tilburg University, Center for Economic Research.
  6. Valerie Lechene & Martin Browning, 2006. "Quelques resultats sur l`effet des transferts cibles," Economics Series Working Papers 294, University of Oxford, Department of Economics.
  7. Cherchye, Laurens & Demuynck, Thomas & De Rock, Bram, 2010. "Noncooperative household consumption with caring," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/289289, Katholieke Universiteit Leuven.
  8. Miriam Beblo & Denis Beninger, 2012. "Do husbands and wives pool their incomes? Experimental evidence," Working Papers of BETA 2012-10, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

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