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Estimation of the Sharing Rule Between Adults and Children and Related Equivalence Scales Within a Collective Consumption Framework

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Author Info
Vincenzo Atella () (University of Rome II - Faculty of Economics)
Carlos Arias (Universidad de Le—n)
Federico Perali (University of Verona - Department of Economics)
Raffaella Castagnini (World Bank)

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Abstract

In order to determine how much money is needed to make each household member as well off as they were before a change in living conditions, equivalence scales should be defined on the basis of individual rather than household welfare. This requires the knowledge of individual utilities that are derivable from the identification of the rule governing the intra-household allocation of resources within a collective approach. We pursue this objective using information about male, female and children clothing expenditure present in the 1999 Italian Household budget survey within the estimation of a complete demand system. The sharing rule between adults and children is estimated using a structural rather than a reduced form approach. Maximum simulated likelihood is used to estimate a collective model of individual demand equations with zero expenditures for the exclusive good clothing. The recovery of individual utilities for adults and children permits the estimation of the cost of children taking the intra-household distribution of resources into account. We show that the cost of Italian children is significantly affected by the parents' aversion to intra-household inequality.

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Paper provided by Tor Vergata University, CEIS in its series CEIS Research Paper with number 28.

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Length: 34
Date of creation: 30 Nov 2003
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Handle: RePEc:rtv:ceisrp:28

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Related research
Keywords: Collective Approach; Sharing Rule; Clothing; Equivalence Scales;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
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  15. Lewbel, Arthur, 1985. "A Unified Approach to Incorporating Demographic or Other Effects into Demand Systems," Review of Economic Studies, Blackwell Publishing, vol. 52(1), pages 1-18, January. [Downloadable!] (restricted)
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  19. Perali, Federico & Chavas, Jean-Paul, 2000. " Estimation of Censored Demand Equations from Large Cross-Section Data," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 82(4), pages 1022-37, November. [Downloadable!] (restricted)
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  21. Richard Blundell & Alan Duncan & Krishna Pendakur, 1998. "Semiparametric estimation and consumer demand," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(5), pages 435-461. [Downloadable!]
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  23. Antonella Caiumi & Federico Perali, 1999. "Children And Intrahousehold Distribution Of Resources: An Estimate Of The Sharing Rule Of Italian Households," CHILD Working Papers wp07_00, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Martina Menon & Federico Perali & Luca Piccoli, 2008. "The passive drinking effect: Evidence from Italy," PSE Working Papers 2008-33, PSE (Ecole normale supérieure). [Downloadable!]
  2. M. Menon & F. Perali & F. Rosati, 2005. "The Shadow Wage of Child Labour: An Application to Nepal," UCW Working Paper 11, Understanding Children's Work (UCW Project). [Downloadable!]
  3. Marcella Veronesi & Martina Menon & Federico Perali, 2007. "Extension of the Traditional Travel Cost Method to a Collective Framework: An Empirical Application," Working Papers 42, Università di Verona, Dipartimento di Scienze economiche. [Downloadable!]
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