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On the expenditure-dependence of children’s resource shares

  • Menon, Martina
  • Pendakur, Krishna
  • Perali, Federico

Collective household models posit that each household member has access to a fraction of the household budget, called a resource share, which defines the shadow budget faced by a household member. Together with the within-household shadow price vector, the shadow budget determines the material well-being of the household member. In general, it is difficult to identify resource shares from typical household-level consumption data. However, several recent papers have shown that if resource shares do not depend on total household expenditure, then identification of resource shares may proceed from commonly available Engel curve data. Unfortunately, typical datasets do not allow the testing of this restriction. In this paper, we use a novel Italian dataset to establish that children’s resource shares do not exhibit much dependence on total household expenditure. Thus, identification of resource shares on the basis of this restriction may be valid.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 117 (2012)
Issue (Month): 3 ()
Pages: 739-742

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Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:739-742
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Lewbel, Arthur, 2003. "Calculating compensation in cases of wrongful death," Journal of Econometrics, Elsevier, vol. 113(1), pages 115-128, March.
  2. Frederic Vermeulen, 2000. "Collective household models: principles and main results," Public Economics Working Paper Series ces0028, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
  3. Rob Alessie & Thomas Crossley & Vincent Hildebrand, 2006. "Estimating a collective household model with survey data on financial satisfaction," IFS Working Papers W06/19, Institute for Fiscal Studies.
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  6. Olivier Bargain & Olivier Donni & Monnet Gbakou, 2010. "The Measurement of Child Costs: Evidence from Ireland," Working Papers 201002, School Of Economics, University College Dublin.
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  8. Bargain, Olivier & Donni, Olivier & Kwenda, Prudence, 2011. "Intrahousehold Distribution and Child Poverty: Theory and Evidence from Côte d’Ivoire," IZA Discussion Papers 6029, Institute for the Study of Labor (IZA).
  9. Arthur Lewbel & Krishna Pendakur, 2008. "Estimation of Collective Household Models With Engel Curves," Boston College Working Papers in Economics 694, Boston College Department of Economics.
  10. Aline Bütikofer & Michael Gerfin, 2009. "The economies of scale of living together and how they are shared - Estimates based on a collective household model," Diskussionsschriften dp0903, Universitaet Bern, Departement Volkswirtschaft.
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  12. Becker, Gary S, 1981. "Altruism in the Family and Selfishness in the Market Place," Economica, London School of Economics and Political Science, vol. 48(189), pages 1-15, February.
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