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Identification of Random Resource Shares in Collective Households Without Preference Similarity Restrictions

Author

Listed:
  • Geoffrey R. Dunbar
  • Arthur Lewbel
  • Krishna Pendakur

Abstract

Resource shares, defined as the fraction of total household spending going to each person in a household, are important for assessing individual material well-being, inequality and poverty. They are difficult to identify because consumption is measured typically at the household level, and many goods are jointly consumed, so that individual-level consumption in multi-person households is not directly observed. We consider random resource shares, which vary across observationally identical households. We provide theorems that identify the distribution of random resource shares across households, including children’s shares. We also provide a new method of identifying the level of fixed or random resource shares that does not require previously needed preference similarity restrictions or marriage market assumptions. Our results can be applied to data with or without price variation. We apply our results to households in Malawi, estimating the distributions of child and female poverty across households.

Suggested Citation

  • Geoffrey R. Dunbar & Arthur Lewbel & Krishna Pendakur, 2017. "Identification of Random Resource Shares in Collective Households Without Preference Similarity Restrictions," Staff Working Papers 17-45, Bank of Canada.
  • Handle: RePEc:bca:bocawp:17-45
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    References listed on IDEAS

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    1. Arthur Lewbel, 2003. "A rational rank four demand system," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(2), pages 127-135.
    2. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, October.
    3. 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.
    4. Couprie, Hélène & Peluso, Eugenio & Trannoy, Alain, 2010. "Is power more evenly balanced in poor households?," Journal of Public Economics, Elsevier, vol. 94(7-8), pages 493-507, August.
    5. 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.
    6. Bargain, Olivier & Donni, Olivier, 2012. "Expenditure on children: A Rothbarth-type method consistent with scale economies and parents' bargaining," European Economic Review, Elsevier, vol. 56(4), pages 792-813.
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    Citations

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    Cited by:

    1. Donni, Olivier & Molina, José Alberto, 2018. "Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence," IZA Discussion Papers 11915, Institute of Labor Economics (IZA).
    2. Klein, Matthew J. & Barham, Bradford L., 2018. "Point Estimates of Household Bargaining Power Using Outside Options," Staff Paper Series 590, University of Wisconsin, Agricultural and Applied Economics.
    3. repec:eee:jeborg:v:161:y:2019:i:c:p:265-286 is not listed on IDEAS
    4. Tommasi, Denni, 2019. "Control of resources, bargaining power and the demand of food: Evidence from PROGRESA," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 265-286.
    5. Klein, Matthew J. & Barham, Bradford L. & Wu, Yuexuan, 2019. "Gender Equality in the Family Can Reduce the Malaria Burden in Malawi," Staff Paper Series 594, University of Wisconsin, Agricultural and Applied Economics.

    More about this item

    Keywords

    Domestic demand and components; Econometric and statistical methods;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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