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Unitary versus collective models of the household : time to shift theburden of proof?

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  • Chiappori, Pierre-Andre
  • Haddad, Lawrence
  • Hoddinott, John
  • Kanbur, Ravi

Abstract

Until recently, most economists viewed the household as a collection of individuals who behave as if in agreement on how best to combine time and goods (purchased or produced at home) to produce commodities that maximize some common welfare index. This model has been extended far beyond standard demand analysis to include the determinants of health, fertility, education, child fostering, migration, labor supply, home production, land tenure, and crop adoption. The appeal of the unitary model is the simplicity of comparative statics generated and the diversity of issues it can address. But, argue the authors, its theoretical foundations are weak and restrictive; its underlying assumptions are of questionable validity; it has not stood up well to empirical testing; and it ignores or obscures important policy issues. They argue that economists should regard households as collective rather than unitary entities. They make a case for accepting the collective model (with cooperative and noncooperative versions) as the industry standard - with caveats. The unitary model should be regarded as a special subset of the collective approach, suitable under certain conditions. The burden of proof should shift to those who claim the unitary model as the rule and collective models as the exception. Implicit in the authors'argument is the view that household economics has not taken Becker seriously enough."A household is truly a'small factory,'"wrote Becker (1965)."It combines capital goods, raw materials, and labor to clean, feed, procreate, and otherwise produce useful commodities."The authors, too, perceive the household as a factory, which, like all factories, contains individuals who - motivated at times by altruism, at times by self-interest, and often by both - cajole, cooperate, threaten, help, argue, support, and, indeed, occasionally walk out on each other. Labor economists and industrial organization theorists have long exploited the value of going inside the black box of the factory. It is time to do the same for household economics, say the authors.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1217.

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Date of creation: 30 Nov 1993
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Handle: RePEc:wbk:wbrwps:1217

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Keywords: Health Economics&Finance; Environmental Economics&Policies; Poverty Lines; Housing&Human Habitats; Educational Technology and Distance Education;

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  1. T. Paul Schultz, 1990. "Testing the Neoclassical Model of Family Labor Supply and Fertility," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 599-634.
  2. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986. "The Strategic Bequest Motive," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 4(3), pages S151-82, July.
  3. Bernheim, B Douglas & Stark, Oded, 1988. "Altruism within the Family Reconsidered: Do Nice Guys Finish Last?," American Economic Review, American Economic Association, American Economic Association, vol. 78(5), pages 1034-45, December.
  4. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(6), pages 988-1010, December.
  5. Duncan Thomas, 1990. "Intra-Household Resource Allocation: An Inferential Approach," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 635-664.
  6. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, Econometric Society, vol. 52(3), pages 761-66, May.
  7. Barro, Robert J., 1974. "Are Government Bonds Net Wealth?," Scholarly Articles 3451399, Harvard University Department of Economics.
  8. Ashenfelter, Orley & Heckman, James J, 1974. "The Estimation of Income and Substitution Effects in a Model of Family Labor Supply," Econometrica, Econometric Society, Econometric Society, vol. 42(1), pages 73-85, January.
  9. Bruce, Neil & Waldman, Michael, 1990. "The Rotten-Kid Theorem Meets the Samaritan's Dilemma," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 105(1), pages 155-65, February.
  10. Hoddinott, John, 1992. "Rotten Kids or Manipulative Parents: Are Children Old Age Security in Western Kenya?," Economic Development and Cultural Change, University of Chicago Press, University of Chicago Press, vol. 40(3), pages 545-65, April.
  11. Bergstrom, Theodore C, 1989. "A Fresh Look at the Rotten Kid Theorem--and Other Household Mysteries," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 97(5), pages 1138-59, October.
  12. Marjorie B. McElroy, 1990. "The Empirical Content of Nash-Bargained Household Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 559-583.
  13. Lundberg, Shelly J, 1988. "Labor Supply of Husbands and Wives: A Simultaneous Equations Approach," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 224-35, May.
  14. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262582384, December.
  15. Hoddinott, J. & Haddad, L., 1991. "Household Expenditures, Child Anthropometric Status and the Intrahousehold Division of Income: Evidence from the Cote d'Ivoire," Papers, Princeton, Woodrow Wilson School - Development Studies 155, Princeton, Woodrow Wilson School - Development Studies.
  16. Tauchen, Helen V & Witte, Ann Dryden & Long, Sharon K, 1991. "Domestic Violence: A Nonrandom Affair," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(2), pages 491-511, May.
  17. Folbre, Nancy, 1986. "Hearts and spades: Paradigms of household economics," World Development, Elsevier, Elsevier, vol. 14(2), pages 245-255, February.
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