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Recovering Hicksian Consumer Surplus within a Collective Model: Hausman's Method for the Household

Abstract

The purpose of this paper is to describe the implications of the collective model of household behavior for the methods used to estimate the economic value of non-marketed environmental resources. After demonstrating how the separability restrictions inherent in the collective model allow individual preference and household income allocation choices to be distinguished, the paper demonstrates how the framework can be used to recover Hicksian consumer surplus. An algebraic example is used to illustrate how the framework can be used in valuing environmental resources. Copyright Kluwer Academic Publishers 2004

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File URL: http://hdl.handle.net/10.1023/B:EARE.0000029916.05630.89
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Article provided by Springer & European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 28 (2004)
Issue (Month): 2 (June)
Pages: 153-167

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Handle: RePEc:kap:enreec:v:28:y:2004:i:2:p:153-167
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Keywords: benefit estimation; collective model; household behavior;

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  1. Whittington, Dale, 1998. "Administering contingent valuation surveys in developing countries," World Development, Elsevier, vol. 26(1), pages 21-30, January.
  2. Dellaert, B.G.C. & Prodigalidad, M. & Louviere, J.J., 1997. "Family members' projection of each other's preference and influence : a two-stage conjoint approach," Discussion Paper 1997-93, Tilburg University, Center for Economic Research.
  3. Ted Bergstrom, 1995. "A Survey of Theories of the Family," Papers _027, University of Michigan, Department of Economics.
  4. Kooreman, P. & Kapteyn, A.J., 1984. "A disaggregated analysis of the allocation of time within the household," Research Memorandum FEW 153, Tilburg University, School of Economics and Management.
  5. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  6. Browning, M. & Chiappori, P.A., 1994. "Efficient Intra-Household allocations: A General Characterization and Empirical Tests," DELTA Working Papers 94-16, DELTA (Ecole normale supérieure).
  7. John Quiggin, 1998. "Individual and Household Willingness to Pay for Public Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 58-63.
  8. Alderman, Harold, et al, 1995. "Unitary versus Collective Models of the Household: Is It Time to Shift the Burden of Proof?," World Bank Research Observer, World Bank Group, vol. 10(1), pages 1-19, February.
  9. Larson, Douglas M., 1991. "Recovering weakly complementary preferences," Journal of Environmental Economics and Management, Elsevier, vol. 21(2), pages 97-108, September.
  10. Bockstael, N E & McConnell, K E, 1993. "Public Goods as Characteristics of Non-market Commodities," Economic Journal, Royal Economic Society, vol. 103(420), pages 1244-57, September.
  11. Diewert, W. E., 1977. "Generalized slutsky conditions for aggregate consumer demand functions," Journal of Economic Theory, Elsevier, vol. 15(2), pages 353-362, August.
  12. Doss, Cheryl R., 1996. "Testing among models of intrahousehold resource allocation," World Development, Elsevier, vol. 24(10), pages 1597-1609, October.
  13. Richard Blundell & Jean-Marc Robin, 2000. "Latent Separability: Grouping Goods without Weak Separability," Econometrica, Econometric Society, vol. 68(1), pages 53-84, January.
  14. Pollak, Robert A & Wales, Terence J, 1981. "Demographic Variables in Demand Analysis," Econometrica, Econometric Society, vol. 49(6), pages 1533-51, November.
  15. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  16. V. Kerry Smith & H. Spencer Banzhaf, 2004. "A Diagrammatic Exposition of Weak Complementarity and the Willig Condition," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 455-466.
  17. Hersch, Joni & Stratton, Leslie S, 1994. "Housework, Wages, and the Division of Housework Time for Employed Spouses," American Economic Review, American Economic Association, vol. 84(2), pages 120-25, May.
  18. Alderman, H. & Chiappori, P.A. & Haddad, L., 1994. "Unitary versus Collective Models of the Household: Time to Shift the Burden of Proof?," DELTA Working Papers 94-17, DELTA (Ecole normale supérieure).
  19. Hausman, Jerry A, 1981. "Exact Consumer's Surplus and Deadweight Loss," American Economic Review, American Economic Association, vol. 71(4), pages 662-76, September.
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Cited by:

  1. Cai, Yongxia & Shaw, W. Douglass & Wu, Ximing, 2008. "Risk Perception and Altruistic Averting Behavior: Removing Arsenic in Drinking Water," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6149, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Phaneuf, Daniel J. & Smith, V. Kerry, 2006. "Recreation Demand Models," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 15, pages 671-761 Elsevier.
  3. Alistair Munro, 2009. "Introduction to the Special Issue: Things We Do and Don’t Understand About the Household and the Environment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(1), pages 1-10, May.
  4. Martina Menon & Federico Perali & Marcella Veronesi, 2014. "Recovering Individual Preferences for Non-Market Goods: A Collective Travel-Cost Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(2), pages 438-457.
  5. Henrik Lindhjem & Ståle Navrud, 2009. "Asking for Individual or Household Willingness to Pay for Environmental Goods?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(1), pages 11-29, May.

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