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Caring and Sharing: Tests Between Alternative Models of Intra-Household Allocation

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  • Valerie Lechene
  • Martin Browning

Abstract

Several models of intra-household decision making have been suggested in the literature. One important dichotomy is between non-cooperative and cooperative models (including specific models of bargaining). The other important distinction is between models that allow for caring and those that do not. We present a framework that includes all suggested models and variants as special cases. We derive the theoretical predictions of these models for the relationship between expenditures on goods and the intra-household distribution of income. We estimate and test between these relationships using Canadian household expenditure data. We conclude that there is evidence that both husbands and wives care for each other in the sense that with an unequal distribution of incomes the high income partner behaves as a `Becker dictator` and there is local income pooling. We further find that for about half of the households in our sample (those with more equal incomes) a re-distribution of income would lead to changes in budget allocations. We conclude that the data are consistent with a collective model with caring partners.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 70.

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Date of creation: 01 Apr 2001
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Handle: RePEc:oxf:wpaper:70

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Keywords: intra-household allocation; altruism; cooperative behaviour; non-cooperative behaviour;

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References

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  1. Chen, Zhiqi & Woolley, Frances, 2001. "A Cournot-Nash Model of Family Decision Making," Economic Journal, Royal Economic Society, vol. 111(474), pages 722-48, October.
  2. Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, vol. 35(3), pages 355-369, April.
  3. Phipps, Shelley A & Burton, Peter S, 1998. "What's Mine Is Yours? The Influence of Male and Female Incomes on Patterns of Household Expenditure," Economica, London School of Economics and Political Science, vol. 65(260), pages 599-613, November.
  4. 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.
  5. Bourguignon, F. & Browning, M. & Chiappori, P. A., 1995. "The Collective Approach to Household Behaviour," DELTA Working Papers 95-04, DELTA (Ecole normale supérieure).
  6. François BOURGUIGNON & Martin BROWNING & Pierre-André CHIAPPORI & Valérie LECHENE, 1993. "Intra Household Allocation of Consumption: A Model and some Evidence from French Data," Annales d'Economie et de Statistique, ENSAE, issue 29, pages 137-156.
  7. Konrad, Kai A & Lommerud, Kjell Erik, 1995. " Family Policy with Non-cooperative Families," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 581-601, December.
  8. Kooreman, P. & Kapteyn, A.J., 1990. "On the empirical implementation of some game theoretic models of household labor supply," Open Access publications from Tilburg University urn:nbn:nl:ui:12-364364, Tilburg University.
  9. 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.
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Cited by:
  1. 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.
  2. Frederic Vermeulen & Olivier Bargain & Miriam Beblo & Denis Beninger & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Nicolas Moreau & Michal Myck , 2006. "Collective Models of Labor Supply with Nonconvex Budget Sets and Nonparticipation: A Calibration Approach," Review of Economics of the Household, Springer, vol. 4(2), pages 113-127, 06.
  3. Olivier Bargain & Nicolas Moreau, 2003. "Is the Collective Model of Labor Supply Useful for Tax Policy Analysis? A Simulation Exercise," CESifo Working Paper Series 1052, CESifo Group Munich.
  4. Kati Schindler, 2010. "Credit for What? Informal Credit as a Coping Strategy of Market Women in Northern Ghana," Journal of Development Studies, Taylor & Francis Journals, vol. 46(2), pages 234-253.
  5. Olivier Bargain, 2008. "Normative evaluation of tax policies: from households to individuals," Journal of Population Economics, Springer, vol. 21(2), pages 339-371, April.
  6. Olivier Bargain & Miriam Beblo & Denis Beninger & Richard Blundell & Raquel Carrasco & Maria-Concetta Chiuri & François Laisney & Valérie Lechene & Nicolas Moreau & Michal Myck & Javier Ruiz-Castill, 2006. "Does the Representation of Household Behavior Matter for Welfare Analysis of Tax-benefit Policies? An Introduction," Review of Economics of the Household, Springer, vol. 4(2), pages 99-111, 06.
  7. Bargain, Olivier & Moreau, Nicolas, 2006. "Effets d’une réforme fiscale sur l’offre de travail des ménages dans un cadre collectif simulé," L'Actualité Economique, Société Canadienne de Science Economique, vol. 82(1), pages 207-246, mars-juin.
  8. Koohi-Kamali, Feridoon, 2008. "Intrahousehold inequality and child gender bias in Ethiopia," Policy Research Working Paper Series 4755, The World Bank.
  9. Katarina Nordblom, 2004. "Cohabitation and Marriage in a Risky World," Review of Economics of the Household, Springer, vol. 2(3), pages 325-340, 04.
  10. Olivier Donni, 2004. "La théorie des modèles non coopératifs d'offre de travail et ses applications empiriques," Cahiers de recherche 0409, CIRPEE.
  11. Chiappori, Pierre-André & Donni, Olivier, 2006. "Les modèles non unitaires de comportement du ménage : un survol de la littérature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 82(1), pages 9-52, mars-juin.
  12. Donni, Olivier, 2006. "Les modèles non coopératifs d’offre de travail : théorie et évidence," L'Actualité Economique, Société Canadienne de Science Economique, vol. 82(1), pages 181-206, mars-juin.
  13. Bargain, Olivier & Moreau, Nicolas, 2005. "Cooperative Models in Action: Simulation of a Nash-Bargaining Model of Household Labor Supply with Taxation," IZA Discussion Papers 1480, Institute for the Study of Labor (IZA).

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