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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
Carlos Arias ()
Vincenzo Atella ()
Raffaella Castagnini ()
Federico Perali ()

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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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Publisher Info
Paper provided by CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY in its series CHILD Working Papers with number wp07_03.

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Length: 31 pages
Date of creation: Jul 2003
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Handle: RePEc:wpc:wplist:wp07_03

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

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Find related papers by JEL classification:
C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - General
D10 - Microeconomics - - Household Behavior - - - General
J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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:
  3. Goldberger, Arthur S, 1972. "Maximum-Likelihood Estimation of Regressions Containing Unobservable Independent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(1), pages 1-15, February. [Downloadable!] (restricted)
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  13. Carlos Arias & THOMAS L. COX, 1999. "Maximum Simulated Likelihood: A Brief Introduction for Practitioners," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 421, Wisconsin-Madison Agricultural and Applied Economics Department. [Downloadable!]
  14. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February. [Downloadable!] (restricted)
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  15. Bourguignon, F. & Browning, M. & Chiappori, P. A., 1995. "The Collective Approach to Household Behaviour," DELTA Working Papers 95-04, DELTA (Ecole normale supérieure).
  16. 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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  18. 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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  21. Mroz, Thomas A, 1987. "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," Econometrica, Econometric Society, vol. 55(4), pages 765-99, July. [Downloadable!] (restricted)
    Other versions:
  22. 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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    Other versions:
Full references

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. 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!]
  2. Martina Menon & Federico Perali & Luca Piccoli, 2008. "The passive drinking effect: Evidence from Italy," PSE Working Papers 2008-33, PSE (Ecole normale supérieure). [Downloadable!]
  3. 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!]
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