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Distributional Effects in Household Models: Separate Spheres and Income Pooling

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  • Martin Browning
  • Pierre-André Chiappori
  • Valérie Lechene

Abstract

We derive distributional effects for a non-cooperative alternative to the unitary model of household behaviour. We consider the Nash equilibria of a voluntary contributions to public goods game. Our main result is that, in general, the two partners either choose to contribute to different public goods or they contribute to at most one common good. The former case corresponds to the separate spheres case of Lundberg and Pollak (1993) . The second outcome yields (local) income pooling. A household will be in different regimes depending on the distribution of income within the household. Any bargaining model with this non-cooperative case as a breakdown point will inherit the local income pooling. We conclude that targeting benefits such as child benefits to one household member may not always have an effect on outcomes. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.

Suggested Citation

  • Martin Browning & Pierre-André Chiappori & Valérie Lechene, 2010. "Distributional Effects in Household Models: Separate Spheres and Income Pooling," Economic Journal, Royal Economic Society, vol. 120(545), pages 786-799, June.
  • Handle: RePEc:ecj:econjl:v:120:y:2010:i:545:p:786-799
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    References listed on IDEAS

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    1. Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
    2. Richard Blundell & Pierre-André Chiappori & Costas Meghir, 2005. "Collective Labor Supply with Children," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1277-1306, December.
    3. Kemp, Murray C., 1984. "A note of the theory of international transfers," Economics Letters, Elsevier, vol. 14(2-3), pages 259-262.
    4. 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.
    5. 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.
    6. Lundberg, S.J. & Pollak, R.A. & Wales, T.J., 1994. "Do Husbands and Wives Pool Their Resources? Evidence from U.K. Child Benefit," Working Papers 94-6, University of Washington, Department of Economics.
    7. Valérie Lechene & Ian Preston, 2005. "Household Nash equilibrium with voluntarily contributed public goods," IFS Working Papers W05/06, Institute for Fiscal Studies.
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    Citations

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    Cited by:

    1. Claude d’Aspremont & Rodolphe Dos Santos Ferreira, 2009. "Household behavior and individual autonomy," Working Papers of BETA 2009-17, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    2. Jens Bonke & Hans Uldall-Poulsen, 2007. "Why do families actually pool their income? Evidence from Denmark," Review of Economics of the Household, Springer, vol. 5(2), pages 113-128, June.
    3. Melanie Lührmann & Jürgen Maurer, 2007. "Who wears the trousers? A semiparametric analysis of decision power in couples," CeMMAP working papers CWP25/07, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    4. Lechene, Valérie & Preston, Ian, 2011. "Noncooperative household demand," Journal of Economic Theory, Elsevier, vol. 146(2), pages 504-527, March.
    5. Afzal, Uzma & d Adda, Giovanna & Fafchamps, Marcel & Said, Farah, 2016. "Gender and Agency within the Household: Experimental Evidence from Pakistan," CEPR Discussion Papers 11464, C.E.P.R. Discussion Papers.
    6. Karagiannaki, Eleni & Platt, Lucinda, 2015. "The changing distribution of individual incomes in the UK before and after the recession," LSE Research Online Documents on Economics 63906, London School of Economics and Political Science, LSE Library.
    7. Laurens CHERCHYE & Thomas DEMUYNCK & Bram DE ROCK, 2009. "Degrees of cooperation in household consumption models: a revealed preference analysis," Working Papers Department of Economics ces09.20, KU Leuven, Faculty of Economics and Business, Department of Economics.
    8. Farah Said, 2016. "Access to Finance and Agency: An Overview of the Constraints to Female-Run Enterprises," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 331-349, September.
    9. Wiktor Adamowicz & Mark Dickie & Shelby Gerking & Marcella Veronesi & David Zinner, 2014. "Household Decision Making and Valuation of Environmental Health Risks to Parents and Their Children," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(4), pages 481-519.
    10. Ori Zax, 2015. "Human Capital And The Probability Of Divorce," Bulletin of Economic Research, Wiley Blackwell, vol. 67(S1), pages 111-134, December.
    11. Valerie Lechene & Martin Browning, 2006. "Quelques resultats sur l`effet des transferts cibles," Economics Series Working Papers 294, University of Oxford, Department of Economics.
    12. Keane, Claire & Callan, Tim & Walsh, John, 2015. "Gender Impact of Tax and Benefit Changes: A Microsimulation Approach," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT275.
    13. Claude d’Aspremont & Rodolphe Dos Santos Ferreira, 2014. "Household behavior and individual autonomy: an extended Lindahl mechanism," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(3), pages 643-664, April.
    14. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Frederic Vermeulen, 2017. "Household Consumption When the Marriage Is Stable," American Economic Review, American Economic Association, vol. 107(6), pages 1507-1534, June.
    15. Laurens CHERCHYE & Thomas DEMUYNCK & Bram DE ROCK, 2010. "Noncooperative household consumption with caring," Working Papers Department of Economics ces10.34, KU Leuven, Faculty of Economics and Business, Department of Economics.
    16. repec:gii:giihei:ciesrp:cies_rp_27 is not listed on IDEAS
    17. Paul Fisher, 2016. "British tax credit simplification, the intra-household distribution of income and family consumption," Oxford Economic Papers, Oxford University Press, vol. 68(2), pages 444-464.
    18. repec:kap:reveho:v:15:y:2017:i:3:d:10.1007_s11150-016-9342-0 is not listed on IDEAS
    19. Eleni Karagiannaki & Lucinda Platt, 2015. "The changing distribution of individual incomes in the UK before and after the recession," CASE Papers /192, Centre for Analysis of Social Exclusion, LSE.
    20. Laurens Cherchye & Sam Cosaert & Thomas Demuynck & Bram De Rock, 2017. "Group Consumption with Caring Individuals," Working Papers ECARES ECARES 2017-45, ULB -- Universite Libre de Bruxelles.
    21. Miriam Beblo & Denis Beninger, 2012. "Do husbands and wives pool their incomes? Experimental evidence," Working Papers of BETA 2012-10, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    22. Chiara Ravetti & Yana Popp Jin & Mu Quan & Zhang Shiqiu & Timothy Swanson, 2014. "Air pollution in Urban Beijing: The role of Government-controlled information," CIES Research Paper series 27-2014, Centre for International Environmental Studies, The Graduate Institute.
    23. Jean-Marie Baland & Roberta Ziparo, 2017. "Intra-household bargaining in poor countries," WIDER Working Paper Series 108, World Institute for Development Economic Research (UNU-WIDER).
    24. Gutierrezy, Federico H., 2018. "A Sharing Model of the Household: Explaining the Deaton-Paxson Paradox and Computing Household Indifference Scales," GLO Discussion Paper Series 166, Global Labor Organization (GLO).
    25. Sabrina Bruyneel & Laurens Cherchye & Bram De Rock, 2012. "Collective consumption models with restricted bargaining weights: an empirical assessment based on experimental data," Review of Economics of the Household, Springer, vol. 10(3), pages 395-421, September.

    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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