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Intra‐Household Resource Allocation, Consumer Preferences and Commodity Tax Reforms: Australian Evidence

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  • Paul Blacklow
  • Ranjan Ray

Abstract

Empirical analysis of household expenditure behaviour has traditionally ignored the issue of resource allocation between household members, assuming that they have identical or unitary preferences. This paper relaxes that assumption, develops a household sharing rule and proposes intra‐household demand systems that are able to identify differences in the preferences of members from conventional data. The resulting price and expenditure elasticities are used to demonstrate that collective demand models suggest different directions for commodity tax reforms to those implied by the traditional unitary model.

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  • Paul Blacklow & Ranjan Ray, 2003. "Intra‐Household Resource Allocation, Consumer Preferences and Commodity Tax Reforms: Australian Evidence," The Economic Record, The Economic Society of Australia, vol. 79(247), pages 425-433, December.
    • Handle: RePEc:bla:ecorec:v:79:y:2003:i:247:p:425-433
    DOI: 10.1111/j.1475-4932.2003.00142.x
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    References listed on IDEAS

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    1. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, March.
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    7. Kaushik Basu, 2006. "Gender and Say: a Model of Household Behaviour with Endogenously Determined Balance of Power," Economic Journal, Royal Economic Society, vol. 116(511), pages 558-580, April.
    8. Madden, David, 1996. "Marginal Tax Reform and the Specification of Consumer Demand Systems," Oxford Economic Papers, Oxford University Press, vol. 48(4), pages 556-567, October.
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    Cited by:

    1. Helmuth Cremer & Jean-Marie Lozachmeur & Kerstin Roeder, 2021. "Household bargaining, spouses’ consumption patterns and the design of commodity taxes," Oxford Economic Papers, Oxford University Press, vol. 73(1), pages 225-247.
    2. Donni, Olivier & Molina, José Alberto, 2018. "Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence," IZA Discussion Papers 11915, Institute of Labor Economics (IZA).
    3. S M Finlay, 2006. "Predictive models of expenditure and over-indebtedness for assessing the affordability of new consumer credit applications," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(6), pages 655-669, June.
    4. Xu, Zeyu, 2007. "A survey on intra-household models and evidence," MPRA Paper 3763, University Library of Munich, Germany.
    5. Botha, Ferdi & Ribar, David C., 2023. "For worse? Financial hardships and intra-household resource allocation among Australian couples," Economic Modelling, Elsevier, vol. 119(C).
    6. Lori J. Curtis & JoAnn Kingston-Riechers, 2010. "Implications of the Introduction of the Goods and Services Tax for Families in Canada," Canadian Public Policy, University of Toronto Press, vol. 36(4), pages 503-520, December.

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