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Household Consumption When the Marriage is Stable

Listed author(s):
  • 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
Publication status: Published by:
Handle: RePEc:eca:wpaper:2013/159546
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  2. Cherchye, Laurens & Vermeulen, Frederic, 2006. "Nonparametric Analysis of Household Labor Supply: Goodness-of-Fit and Power of the Unitary and the Collective Model," IZA Discussion Papers 2004, Institute for the Study of Labor (IZA).
  3. 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.
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  24. Cherchye, L.J.H. & de Rock, B. & Vermeulen, F.M.P., 2010. "Married with Children : A Collective Labor Supply Model with Detailed Time Use and Intrahousehold Expenditure Information," Discussion Paper 2010-99, Tilburg University, Center for Economic Research.
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