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On the expenditure-dependence of children’s resource shares

Author

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

Abstract

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.

Suggested Citation

  • Menon, Martina & Pendakur, Krishna & Perali, Federico, 2012. "On the expenditure-dependence of children’s resource shares," Economics Letters, Elsevier, vol. 117(3), pages 739-742.
  • Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:739-742
    DOI: 10.1016/j.econlet.2012.08.012
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    References listed on IDEAS

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    7. Lewbel, Arthur, 2003. "Calculating compensation in cases of wrongful death," Journal of Econometrics, Elsevier, vol. 113(1), pages 115-128, March.
    8. Lewbel, Arthur & Pendakur, Krishna, 2008. "Estimation of collective household models with Engel curves," Journal of Econometrics, Elsevier, vol. 147(2), pages 350-358, December.
    9. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    10. 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.
    11. 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).
    12. Geoffrey R. Dunbar & Arthur Lewbel & Krishna Pendakur, 2013. "Children's Resources in Collective Households: Identification, Estimation, and an Application to Child Poverty in Malawi," American Economic Review, American Economic Association, vol. 103(1), pages 438-471, February.
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    Cited by:

    1. Jean-paul Chavas & Martina Menon & Federico Perali, 2014. "The Sharing Rule: Where Is It?," Working Papers 27/2014, University of Verona, Department of Economics.
    2. Laurens Cherchye & Bram De Rock & Arthur Lewbel & Frederic Vermeulen, 2015. "Sharing Rule Identification for General Collective Consumption Models," Econometrica, Econometric Society, vol. 83(5), pages 2001-2041, September.
    3. Lucia MANGIAVACCHI & Federico PERALI & Luca Piccoli, 2018. "Intrahousehold Distribution in Migrant-Sending Families," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 84(1), pages 107-148, March.
    4. Bargain, Olivier & Donni, Olivier & Kwenda, Prudence, 2014. "Intrahousehold distribution and poverty: Evidence from Côte d'Ivoire," Journal of Development Economics, Elsevier, vol. 107(C), pages 262-276.
    5. Jean-Paul Chavas & Martina Menon & Elisa Pagani & Federico Perali, 2017. "Collective Household Welfare and Intra-household Inequality," CHILD Working Papers Series 56 JEL Classification: D1, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    6. Denni Tommasi & Alexander Wolf, 2016. "Overcoming Weak Identification in the Estimation of Household Resource Shares," Working Papers ECARES ECARES 2016-12, ULB -- Universite Libre de Bruxelles.
    7. Antonella Caiumi & Federico Perali, 2015. "Who bears the full cost of children? Evidence from a collective demand system," Empirical Economics, Springer, vol. 49(1), pages 33-64, August.
    8. Chavas, Jean-Paul & Menon, Martina & Pagani, Elisa & Perali, Federico, 0. "Collective household welfare and intra-household inequality," Theoretical Economics, Econometric Society.
    9. Denni Tommasi & Arthur Lewbel & Rossella Calvi, 2017. "LATE with Mismeasured or Misspecified Treatment: An application to Women's Empowerment in India," Working Papers ECARES ECARES 2017-27, ULB -- Universite Libre de Bruxelles.
    10. Hubner, Stefan, 2016. "Topics in nonparametric identification and estimation," Other publications TiSEM 08fce56b-3193-46e0-871b-0, Tilburg University, School of Economics and Management.
    11. Martina Menon & Elisa Pagani & Federico Perali, 2016. "A class of individual expenditure functions," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(2), pages 291-305, October.
    12. repec:eee:ecolet:v:163:y:2018:i:c:p:75-78 is not listed on IDEAS

    More about this item

    Keywords

    Collective households; Resource shares; Sharing rule; Identification;

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • D1 - Microeconomics - - Household Behavior
    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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