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Tests of Income Pooling on Household Budget Data: The Australian Evidence


  • Lancaster, G.
  • Ray, R.


The unitary household model implies pooling of all individual incomes. This study distinguishes between various types of income pooling and tests them on Australian household income/expenditure data. The tests recognise the endogeneity of both earned and unearned income and are performed using a 3 SLS estimation procedure that allows feedback between the various equations.

Suggested Citation

  • Lancaster, G. & Ray, R., 2001. "Tests of Income Pooling on Household Budget Data: The Australian Evidence," Papers 2001-02, Tasmania - Department of Economics.
  • Handle: RePEc:fth:tasman:2001-02

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    References listed on IDEAS

    1. Chiswick, Barry R. & Miller, Paul W., 1994. "The determinants of post-immigration investments in education," Economics of Education Review, Elsevier, vol. 13(2), pages 163-177, June.
    2. Ira N. Gang & Klaus F. Zimmermann, 2000. "Is Child like Parent? Educational Attainment and Ethnic Origin," Journal of Human Resources, University of Wisconsin Press, vol. 35(3), pages 550-569.
    3. Julian R. Betts & Magnus Lofstrom, 2000. "The Educational Attainment of Immigrants: Trends and Implications," NBER Chapters,in: Issues in the Economics of Immigration, pages 51-116 National Bureau of Economic Research, Inc.
    4. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 1019-1055.
    5. Ira N. Gang, 1997. "Schooling, Parents and Country," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 66(1), pages 180-186.
    6. Cardak, B.A., 1998. "Preferences Over Education Expenditure," Department of Economics - Working Papers Series 623, The University of Melbourne.
    7. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
    8. Chiswick, Barry R & Miller, Paul M, 1996. "Ethnic Networks and Language Proficiency among Immigrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(1), pages 19-35, February.
    9. Cardak, Buly A, 1999. "Heterogeneous Preferences, Education Expenditures and Income Distribution," The Economic Record, The Economic Society of Australia, vol. 75(228), pages 63-76, March.
    10. Barry R. Chiswick, 1988. "Differences in Education and Earnings Across Racial and Ethnic Groups: Tastes, Discrimination, and Investments in Child Quality," The Quarterly Journal of Economics, Oxford University Press, vol. 103(3), pages 571-597.
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    Cited by:

    1. Tipper, Adam, 2010. "Economic models of the family and the relationship between economic status and health," Social Science & Medicine, Elsevier, vol. 70(10), pages 1567-1573, May.

    More about this item



    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • D19 - Microeconomics - - Household Behavior - - - Other
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy


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