Heterogeneity assumptions in the specification of bargaining models: a study of household level trade-offs between commuting time and salary
With many real world decisions being made in conjunction with other decision makers, or single agent decisions having an influence on other members of the decision maker’s immediate entourage, there is strong interest in studying the relative weight assigned to different agents in such contexts. In the present paper, we focus on the case of one member of a two person household being asked to make choices affecting the travel time and salary of both members. We highlight the presence of significant heterogeneity across individuals not just in their underlying sensitivities, but also in the relative weight they assign to their partner, and show how this weight varies across attributes. This is in contrast to existing work which uses weights assigned to individual agents at the level of the overall utility rather than for individual attributes. We also show clear evidence of a risk of confounding between heterogeneity in marginal sensitivities and heterogeneity in the weights assigned to each member. We show how this can lead to misleading model results, and argue that this may also explain past results showing bargaining or weight parameters outside the usual [0,1] range in more traditional joint decision making contexts. In terms of substantive results, we find that male respondents place more weight on their partner’s travel time, while female respondents place more weight on their partner’s salary. Copyright Springer Science+Business Media New York 2014
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wiktor Adamowicz & Michel Hanemann & Joffre Swait & Reed Johnson & David Layton & Michel Regenwetter & Torsten Reimer & Robert Sorkin, 2005. "Decision Strategy and Structure in Households: A “Groups” Perspective," Marketing Letters, Springer, vol. 16(3), pages 387-399, December.
- Edoardo Marcucci & Amanda Stathopoulos & Lucia Rotaris & Romeo Danielis, 2011.
"Comparing Single and Joint Preferences: A Choice Experiment on Residential Location in Three-Member Households,"
Environment and Planning A,
, vol. 43(5), pages 1209-1225, May.
- Edoardo Marcucci & Amanda Stathopoulos & Lucia Rotaris & Romeo Danielis, 2011. "Comparing single and joint preferences: a choice experiment on residential location in three-member households," Environment and Planning A, Pion Ltd, London, vol. 43(5), pages 1209-1225, May.
- Hess, Stephane & Bierlaire, Michel & Polak, John W., 2005. "Estimation of value of travel-time savings using mixed logit models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(2-3), pages 221-236.
- Train,Kenneth E., 2009.
"Discrete Choice Methods with Simulation,"
Cambridge University Press, number 9780521766555, June.
- Ian Bateman & Alistair Munro, 2005.
"An Experiment on Risky Choice Amongst Households,"
Royal Economic Society, vol. 115(502), pages C176-C189, 03.
- Martin Browning & P.A. Chiappori, 1996.
"Efficient Intra-Household Allocations - A General Characterization and Empirical Tests,"
96-10, University of Copenhagen. Department of Economics.
- M. Browning & P. A. Chiappori, 1998. "Efficient Intra-Household Allocations: A General Characterization and Empirical Tests," Econometrica, Econometric Society, vol. 66(6), pages 1241-1278, November.
- Martin Browning & Pierre-Andre Chiappori, 1994. "Efficient Intra-Household Allocations: a General Characterization and Empirical Tests," Department of Economics Working Papers 1994-02, McMaster University.
- 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).
- Frederic VERMEULEN, 2000.
"Collective Household Models: Principles and Main Results,"
Working Papers Department of Economics
ces0028, KU Leuven, Faculty of Economics and Business, Department of Economics.
- Vermeulen, Frederic, 2002. " Collective Household Models: Principles and Main Results," Journal of Economic Surveys, Wiley Blackwell, vol. 16(4), pages 533-64, September.
- 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.
- Lampietti, Julian, 1999. "Do husbands and wives make the same choices? Evidence from Northern Ethiopia," Economics Letters, Elsevier, vol. 62(2), pages 253-260, February.
- Caussade, Sebastián & Ortúzar, Juan de Dios & Rizzi, Luis I. & Hensher, David A., 2005. "Assessing the influence of design dimensions on stated choice experiment estimates," Transportation Research Part B: Methodological, Elsevier, vol. 39(7), pages 621-640, August.
- 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.
- Alistair Munro, 2009. "Introduction to the Special Issue: Things We Do and Don’t Understand About the Household and the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 43(1), pages 1-10, May.
- Andrew Daly & Stephane Hess & Kenneth Train, 2012. "Assuring finite moments for willingness to pay in random coefficient models," Transportation, Springer, vol. 39(1), pages 19-31, January.
- Dosman, Donna & Adamowicz, Wiktor L., 2002.
"Combining Stated And Revealed Preference Data To Construct An Empirical Examination Of Intrahousehold Bargaining,"
Staff Paper Series
24084, University of Alberta, Department of Resource Economics and Environmental Sociology.
- Donna Dosman & Wiktor Adamowicz, 2006. "Combining Stated and Revealed Preference Data to Construct an Empirical Examination of Intrahousehold Bargaining," Review of Economics of the Household, Springer, vol. 4(1), pages 15-34, 03.
- Rao, Vithala R & Steckel, Joel H, 1991. " A Polarization Model for Describing Group Preferences," Journal of Consumer Research, Oxford University Press, vol. 18(1), pages 108-18, June.
- David A. Hensher & John M. Rose & Ian Black, 2008. "Interactive Agency Choice in Automobile Purchase Decisions: The Role of Negotiation in Determining Equilibrium Choice Outcomes," Journal of Transport Economics and Policy, University of Bath, vol. 42(2), pages 269-296, May.
- Elizabeth Katz, 1997. "The Intra-Household Economics of Voice and Exit," Feminist Economics, Taylor & Francis Journals, vol. 3(3), pages 25-46.
- Nesha Beharry-Borg & David Hensher & Riccardo Scarpa, 2009. "An Analytical Framework for Joint vs Separate Decisions by Couples in Choice Experiments: The Case of Coastal Water Quality in Tobago," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 43(1), pages 95-117, May.
When requesting a correction, please mention this item's handle: RePEc:kap:transp:v:41:y:2014:i:4:p:745-763. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.