Expenditure Decisions of Divorced Mothers and Income Composition
In this paper we analyze the relationship between the income sources of custodial divorced parents and their expenditure patterns. We use data from the Consumer Expenditure Survey to directly investigate the issue of whether or not divorced mothers receiving child support income spend larger amounts on "child goods" than those not receiving child support holding total household income constant. By comparing the estimated coefficients on child support income and other income in an "endogenous" Engel curve specification we argue that we can classify child goods as being public or private and say something about the expenditure patterns of noncustodial fathers under a Nash equilibrium model of parental expenditures on public child goods and some plausible assumptions regarding the manner in which child support transfer decisions are made by noncustodial fathers. Our empirical results indicate that income composition does affect the expenditure patterns of divorced mothers and that consumption externalities exist even among divorced parents.
When requesting a correction, please mention this item's handle: RePEc:uwp:jhriss:v:29:y:1994:iii:1:p:742-761. 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: ()
If references are entirely missing, you can add them using this form.