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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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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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  11. Laurens CHERCHYE & Bram DE ROCK & Arthur LEWBEL & Frederic VERMEULEN, 2012. "Sharing rule identification for general collective consumption models," Center for Economic Studies - Discussion papers ces12.05, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  12. Laurens Cherchye & Thomas Demuynck & Bram De Rock, 2011. "Revealed preference analysis of noncooperative household consumption," ULB Institutional Repository 2013/131709, ULB -- Universite Libre de Bruxelles.
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  34. Marjorie B. McElroy, 1990. "The Empirical Content of Nash-Bargained Household Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 559-583.
  35. 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.
  36. 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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  38. 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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