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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. 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. Chen, Zhiqi & Woolley, Frances, 2001. "A Cournot-Nash Model of Family Decision Making," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 111(474), pages 722-48, October.
  3. Phipps, S.A. & Burton, P.S., 1992. "What's Mine is Yours?: The Influence of Male and Female Incomes on Patterns of Household Expenditure," Department of Economics at Dalhousie University working papers archive, Dalhousie, Department of Economics 92-12, Dalhousie, Department of Economics.
  4. 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.
  5. Bourguignon, F. & Browning, M. & Chiappori, P. A., 1995. "The Collective Approach to Household Behaviour," DELTA Working Papers, DELTA (Ecole normale supérieure) 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. 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.
  8. Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, vol. 35(3), pages 355-369, April.
  9. 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.
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Citations

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Cited by:
  1. Schindler, Kati, 2006. "Credit for what? Informal credit as a coping strategy of market women in northern Ghana," Proceedings of the German Development Economics Conference, Berlin 2006, Verein für Socialpolitik, Research Committee Development Economics 24, Verein für Socialpolitik, Research Committee Development Economics.
  2. Katarina Nordblom, 2004. "Cohabitation and Marriage in a Risky World," Review of Economics of the Household, Springer, Springer, vol. 2(3), pages 325-340, 04.
  3. 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, Société Canadienne de Science Economique, vol. 82(1), pages 9-52, mars-juin.
  4. Bargain, Olivier & Moreau, Nicolas, 2003. "Is the Collective Model of Labor Supply Useful for Tax Policy Analysis? A Simulation Exercise," Cahiers de recherche 0308, CIRPEE.
  5. Bargain, Olivier, 2004. "Normative Evaluation of Tax Policies: From Households to Individuals," IZA Discussion Papers 1441, Institute for the Study of Labor (IZA).
  6. Jens Bonke & Hans Uldall-Poulsen, 2007. "Why do families actually pool their income? Evidence from Denmark," Review of Economics of the Household, Springer, Springer, vol. 5(2), pages 113-128, June.
  7. Olivier Donni, 2004. "La théorie des modèles non coopératifs d'offre de travail et ses applications empiriques," DELTA Working Papers, DELTA (Ecole normale supérieure) 2004-03, DELTA (Ecole normale supérieure).
  8. 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).
  9. Bargain, O. & Beblo, M. & Beninger, D. & Blundell, R. & Carrasco, R. & Chiuri, M-C. & Laisney, F. & Lechene, V. & Moreau, N. & Myck, M. & Ruiz-castillo, J. & Vermeulen, F.M.P., 2006. "Does the representation of household behavior matter for welfare analysis of tax-benefit policies? An introduction," Open Access publications from Tilburg University urn:nbn:nl:ui:12-194159, Tilburg University.
  10. Vermeulen, F.M.P. & Bargain, O. & Beblo, M. & Beninger, D. & Blundell, R. & Carrasco, R. & Chiuri, M-C. & Laisney, F. & Lechene, V. & Moreau, N. & Myck, M. & Ruiz-castillo, J., 2006. "Collective models of labor supply with nonconvex budget sets and nonparticipation: A calibration approach," Open Access publications from Tilburg University urn:nbn:nl:ui:12-194160, Tilburg University.
  11. Olivier Bargain & Nicolas Moreau, 2004. "Effets d'une réforme fiscale sur l'offre de travail des ménages dans un cadre collectif simulé," DELTA Working Papers, DELTA (Ecole normale supérieure) 2004-12, DELTA (Ecole normale supérieure).
  12. Koohi-Kamali, Feridoon, 2008. "Intrahousehold inequality and child gender bias in Ethiopia," Policy Research Working Paper Series 4755, The World Bank.
  13. Keita, Moussa, 2011. "Influence de la négociation intra-ménage sur les dépenses d’éducation dans les ménages au Mali
    [Influence of intra-household bargaining on education expenditures in households in Mali]
    ," MPRA Paper 57592, University Library of Munich, Germany.
  14. Donni, Olivier, 2006. "Les modèles non coopératifs d’offre de travail : théorie et évidence," L'Actualité Economique, Société Canadienne de Science Economique, Société Canadienne de Science Economique, vol. 82(1), pages 181-206, mars-juin.

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