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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. Chiappori, P.A., 1989. "Collective Labour Supply and Welfare," DELTA Working Papers 89-07, DELTA (Ecole normale supérieure).
  2. Rob Alessie & Thomas F. Crossley & Vincent Hildebrand, 2006. "Estimating a Collective Household Model with Survey Data on Financial Satisfaction," Quantitative Studies in Economics and Population Research Reports 409, McMaster University.
  3. 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.
  4. Martin Browning & P.A. Chiappori, 1996. "Efficient Intra-Household Allocations - A General Characterization and Empirical Tests," Discussion Papers 96-10, University of Copenhagen. Department of Economics.
  5. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  6. Bargain, Olivier & Donni, Olivier & Gbakou, Monnet Benoit Patrick, 2009. "The Measurement of Child Costs: Evidence from Ireland," IZA Discussion Papers 4672, Institute for the Study of Labor (IZA).
  7. 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.
  8. Olivier Bargain & Olivier Donni & Prudence Kwenda, 2011. "Intrahousehold Distribution and Child Poverty: Theory and Evidence from Côte d'Ivoire," Working Papers 2011-031, Human Capital and Economic Opportunity Working Group.
  9. Vermeulen, Frederic, 2002. " Collective Household Models: Principles and Main Results," Journal of Economic Surveys, Wiley Blackwell, vol. 16(4), pages 533-64, September.
  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.
  11. Lewbel, Arthur, 2003. "Calculating compensation in cases of wrongful death," Journal of Econometrics, Elsevier, vol. 113(1), pages 115-128, March.
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