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Distributional Effects in Household Models: Separate Spheres and Income Pooling

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  • Martin Browning
  • Pierre-André Chiappori

    (Department of Economics, University of Chicago)

  • Valérie Lechene

    (University of British Columbia
    Wadham College, Oxford)

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 different 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 targetting benefits such as child benefits to one household member may not always have an effect on outcomes.

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File URL: http://www.econ.ku.dk/cam/wp0910/wp0406/2005-08.pdf/
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Bibliographic Info

Paper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2005-08.

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Length: 11 pages
Date of creation: Jun 2005
Date of revision:
Handle: RePEc:kud:kuieca:2005_08

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Keywords: Nash equilibrium; Nash bargaining; collective models; intra-household allocation; local income pooling; separate spheres;

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References

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  1. 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.
  2. Valérie Lechene & Ian Preston, 2005. "Household Nash equilibrium with voluntarily contributed public goods," IFS Working Papers W05/06, Institute for Fiscal Studies.
  3. Pierre-André Chiappori & Richard Blundell & Costas Meghir, 2002. "Collective labour supply with children," IFS Working Papers W02/08, Institute for Fiscal Studies.
  4. 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.
  5. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
  6. Kemp, Murray C., 1984. "A note of the theory of international transfers," Economics Letters, Elsevier, vol. 14(2-3), pages 259-262.
  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. Melanie Lührmann & Jürgen Maurer, 2008. "Who wears the trousers? A semiparametric analysis of decision power in couples," MEA discussion paper series 08168, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  2. Valerie Lechene & Martin Browning, 2006. "Quelques resultats sur l`effet des transferts cibles," Economics Series Working Papers 294, University of Oxford, Department of Economics.
  3. Valérie Lechene & Ian Preston, 2010. "Non cooperative household demand," IFS Working Papers W10/18, Institute for Fiscal Studies.
  4. repec:ese:iserwp:2014-13 is not listed on IDEAS
  5. 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.
  6. Sabrina Bruyneel & Laurens Cherchye & Bram De Rock, 2012. "Collective consumption models with restricted bargaining weights: an empirical assessment based on experimental data," Review of Economics of the Household, Springer, vol. 10(3), pages 395-421, September.
  7. Cherchye, L.J.H. & Demuynck, T. & Rock, B. de, 2011. "Noncooperative Household Consumption with Caring," Discussion Paper 2011-019, Tilburg University, Center for Economic Research.
  8. D’ASPREMONT, Claude & DOS SANTOS FERREIRA, Rodolphe, 2012. "Household behavior and individual autonomy: An extended Lindahl mechanism," CORE Discussion Papers 2012014, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. 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.
  10. 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).
  11. 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.
  12. Wiktor Adamowicz & Mark Dickie & Shelby Gerking & Marcella Veronesi & David Zinner, 2013. "Household Decision-Making and Valuation of Environmental Health Risks to Parents and their Children," NCEE Working Paper Series 201306, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Dec 2013.

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