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Household Consumption When the Marriage is Stable

  • Laurens Cherchye
  • Thomas Demuynck
  • Bram De Rock
  • Frederic Vermeulen

We develop a novel framework to analyze the structural implications of the marriage market for house-hold consumption patterns. We start by de ning a revealed preference characterization of e¢ cient householdconsumption when the marriage is stable. In particular, stability means that the marriage matching is indi-vidually rational and has no blocking pairs. We show that this revealed preference characterization generatestestable conditions even if there is only a single consumption observation per household and individual pref-erences are heterogeneous across households. In addition, the characterization allows for identifying theintrahousehold decision structure (including the sharing rule) under the same minimalistic assumptions. Anapplication to Dutch household data demonstrates the empirical usefulness of our theoretical results.

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File URL: https://dipot.ulb.ac.be/dspace/bitstream/2013/159546/1/2014-21-CHERCHYE_DEMUYNCK_DEROCK_VERMEULEN-household.pdf
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Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers ECARES with number ECARES 2014-21.

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Length: 25 p.
Date of creation: Apr 2014
Date of revision:
Publication status: Published by:
Handle: RePEc:eca:wpaper:2013/159546
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  1. 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.
  2. Stefan Hoderlein & Jörg Stoye, 2014. "Revealed Preferences in a Heterogeneous Population," The Review of Economics and Statistics, MIT Press, vol. 96(2), pages 197-213, May.
  3. Laurens Cherchye & Bram De Rock & Frederic Vermeulen, 2012. "Married with Children: A Collective Labor Supply Model with Detailed Time Use and Intrahousehold Expenditure Information," American Economic Review, American Economic Association, vol. 102(7), pages 3377-3405, December.
  4. Nicolas Jacquemet & Jean-Marc Robin, 2013. "Assortative matching and search with labour supply and home production," CeMMAP working papers CWP07/13, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  5. Richard Blundell & Martin Browning & Ian Crawford, 2005. "Best nonparametric bounds on demand responses," CeMMAP working papers CWP12/05, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  6. Cherchye, L.J.H. & de Rock, B. & Vermeulen, F.M.P., 2007. "The collective model of household consumption : A nonparametric characterization," Other publications TiSEM 0a104373-4fb6-4ef2-9d2b-2, Tilburg University, School of Economics and Management.
  7. Arnaud Dupuy & Alfred Galichon, 2012. "Personality traits and the marriage market," Sciences Po publications 6943, Sciences Po.
  8. Laurens Cherchye & Bram De Rock & Frederic Vermeulen, 2009. "Opening the Black Box of Intrahousehold Decision Making: Theory and Nonparametric Empirical Tests of General Collective Consumption Models," Journal of Political Economy, University of Chicago Press, vol. 117(6), pages 1074-1104, December.
  9. Pierre-André Chiappori & Sonia Oreffice & Climent Quintana-Domeque, 2010. "Fatter Attraction: Anthropometric and Socioeconomic Matching on the Marriage Market," Working Papers 2011-012, Human Capital and Economic Opportunity Working Group.
  10. Sonia Oreffice, 2009. "Sexual orientation and household decision making. Same-sex couples' balance of power and labor supply choices," Working Papers. Serie AD 2009-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  11. Richard Blundell & Pierre-Andre Chiappori & Thierry Magnac & Costas Meghir, 2007. "Collective Labour Supply: Heterogeneity and Non-Participation," Review of Economic Studies, Oxford University Press, vol. 74(2), pages 417-445.
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  13. Martin Browning & Pierre-André Chiappori & Arthur Lewbel, 2013. "Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1267-1303.
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  15. Shannon Seitz & Jeremy Lise, 2005. "Consumption Inequality and Intra-Household Allocations," 2005 Meeting Papers 448, Society for Economic Dynamics.
  16. Browning, Martin & Francois Bourguignon & Pierre-Andre Chiappori & Valerie Lechene, 1994. "Income and Outcomes: A Structural Model of Intrahousehold Allocation," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1067-96, December.
  17. Cherchye, L.J.H. & Vermeulen, F.M.P., 2006. "Nonparametric Analysis of Household Labor Supply : Goodness-of-Fit and Power of the Unitary and the Collective Model," Discussion Paper 2006-13, Tilburg University, Center for Economic Research.
  18. Martin Browning & Valerie Lechene & Pierre-Andre Chiappori, 2006. "Distributional effects in household models: separate spheres and income pooling," Economics Series Working Papers 293, University of Oxford, Department of Economics.
  19. Yuichi Kitamura & Jorg Stoye, 2013. "Nonparametric Analysis of Random Utility Models: Testing," Cowles Foundation Discussion Papers 1902, Cowles Foundation for Research in Economics, Yale University.
  20. Varian, Hal R., 1988. "Revealed preference with a subset of goods," Journal of Economic Theory, Elsevier, vol. 46(1), pages 179-185, October.
  21. Daniela Del Boca & Christopher J. Flinn, 2012. "Household Behavior and the Marriage Market," Carlo Alberto Notebooks 254, Collegio Carlo Alberto.
  22. Federico Echenique & Sangmok Lee & Matthew Shum & M. Bumin Yenmez, 2013. "The Revealed Preference Theory of Stable and Extremal Stable Matchings," Econometrica, Econometric Society, vol. 81(1), pages 153-171, 01.
  23. Jeanne Lafortune & Pierre-Andre Chiappori & Murat Iyigun & Yoram Weiss, 2012. "Changing the Rules Midway: The Impact of Granting Alimony Rights on Existing and Newly-Formed Partnerships," Documentos de Trabajo 424, Instituto de Economia. Pontificia Universidad Católica de Chile..
  24. Laurens Cherchye & Bram De Rock & Frederic Vermeulen, 2011. "The Revealed Preference Approach to Collective Consumption Behaviour: Testing and Sharing Rule Recovery," Review of Economic Studies, Oxford University Press, vol. 78(1), pages 176-198.
  25. Geoffrey Dunbar & Arthur Lewbel & Krishna Pendakur, 2010. "Children's Resources in Collective Households: Identification, Estimation and an Application to Child Poverty in Malawi," Boston College Working Papers in Economics 758, Boston College Department of Economics, revised 31 Jan 2012.
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  30. Cherchye, L.J.H. & de Rock, B. & Lewbel, A. & Vermeulen, F.M.P., 2012. "Sharing Rule Identification for General Collective Consumption Models," Discussion Paper 2012-041, Tilburg University, Center for Economic Research.
  31. 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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  36. Pierre-André Chiappori & Richard Blundell & Costas Meghir, 2002. "Collective labour supply with children," IFS Working Papers W02/08, Institute for Fiscal Studies.
  37. Couprie Helene, Peluso Eugenio and Trannoy Alain, 2009. "Is power more evenly balanced in poor households?," THEMA Working Papers 2009-11, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
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  39. 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.
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