Efficient Intra-household Allocations and Distribution Factors: Implications and Identification

This paper provides an exhaustive characterization of testability and identifiability issues in the collective framework in the absence of price variation; it thus provides a theoretical underpinning for a number of empirical works that have been developed recently. We first provide a simple and general test of the Pareto efficiency hypothesis, which is consistent with all possible assumptions on the private or public nature of goods, all possible consumption externalities between household members, and all types of interdependent individual preferences and domestic production technology; moreover, the test is proved to be necessary and sufficient. We then provide a complete analysis of the identification problem; we show under which assumptions it is possible to identify, from the observation of the household consumption of private goods, the allocation of these goods within the household as well as the Engel curves of individual household members.