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Sharing Rule Identification for General Collective Consumption Models

  • Laurens Cherchye

    (CES, University of Leuven)

  • Bram De Rock

    (ECARES and ECORE, Université Libre de Bruxelles)

  • Arthur Lewbel

    ()

    (Boston College)

  • Frederic Vermeulen

    (CentER, Tilburg University)

We propose a method to identify bounds (i.e. set identification) on the sharing rule for a general collective household consumption model. Unlike the effects of distribution factors, it is well known that the level of the sharing rule cannot be uniquely identified without strong assumptions on preferences across households of different compositions. Our new results show that, though not point identified without these assumptions, bounds on the sharing rule can still be obtained. We get these bounds by applying revealed preference restrictions implied by the collective model to the household’s continuous aggregate demand functions. We obtain informative bounds even if nothing is known about whether each good is public, private, or assignable within the household, though having such information tightens the bounds. An empirical application demonstrates the practical usefulness of our method.

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Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 809.

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Date of creation: 15 May 2012
Date of revision: 01 Jul 2013
Handle: RePEc:boc:bocoec:809
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  1. Browning, M. & Bourguignon, F. & Chiappori, P.A. & Lechene, V., 1992. "Incomes and Outcomes: A structural Model of Intra-Household Allocation," DELTA Working Papers 92-23, DELTA (Ecole normale supérieure).
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  4. Laurens CHERCHYE & Bram DE ROCK & Frederic VERMEULEN, 2010. "Married with children: a collective labor supply model with detailed time use and intrahousehold expenditure information," Center for Economic Studies - Discussion papers ces10.24, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  5. Bargain, Olivier & Donni, Olivier, 2009. "The Measurement of Child Costs: A Rothbarth-Type Method Consistent with Scale Economies," IZA Discussion Papers 4654, Institute for the Study of Labor (IZA).
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  8. Cherchye, L.J.H. & de Rock, B. & Vermeulen, F.M.P., 2011. "The revealed preference approach to collective consumption behavior : Testing and sharing rule recovery," Other publications TiSEM 11c788ab-cf82-4759-a6a8-3, Tilburg University, School of Economics and Management.
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  10. Richard Blundell & Martin Browning & Ian Crawford, 2005. "Best nonparametric bounds on demand responses," IFS Working Papers W05/20, Institute for Fiscal Studies.
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  13. Laurens Cherchye & Bram De Rock & Frederic Vermeulen, 2007. "The Collective Model of Household Consumption: A nonparametric characterization," ULB Institutional Repository 2013/98559, ULB -- Universite Libre de Bruxelles.
  14. Pierre-Andre Chiappori & Bernard Fortin & Guy Lacroix, 2002. "Marriage Market, Divorce Legislation, and Household Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 37-72, February.
  15. Blundell, Richard & Kristensen, Dennis & Matzkin, Rosa, 2014. "Bounding quantile demand functions using revealed preference inequalities," Journal of Econometrics, Elsevier, vol. 179(2), pages 112-127.
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  17. Chiappori, P.A. & Ekeland, I., 2006. "The micro economics of group behavior: General characterization," Journal of Economic Theory, Elsevier, vol. 130(1), pages 1-26, September.
  18. Laurens Cherchye & Bram De Rock & Frederik Vermeulen, 2008. "Economic well-being and poverty among the elderly: an analysis based on a collective consumption model," Center for Economic Studies - Discussion papers ces0807, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
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