Public-good valuation and intrafamily allocation
I derive the marginal value of a public good in multiperson households, measured alternatively by one household member’s willingness to pay (WTP) for the good on behalf of the household, or by the sum of individual WTP values across family members. Households are assumed to allocate their resources using efficient Nash bargains over two goods, one private good for each member, and one common household good. We show that with no altruism among two family members, member 1’s WTP on behalf of the household is on average a correct representation of true aggregate household WTP for the public good, and is higher (lower) than this average when member 1 has a higher (lower) marginal value of the public good than member 2. Nonpaternalistic altruism makes each of the two members’ WTP on behalf of the household closer to the true aggregate WTP. With paternalistic altruism, attached to consumption of the public good, higher altruism raises aggregate WTP. Higher altruism on the part of both members then moves individual-based WTP closer to true aggregate WTP, while the opposite may occur when only one member is altruistic.
|Date of creation:||18 Jun 2003|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway|
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475, November.
- Johansson, Per-Olov, 1994. "Altruism and the value of statistical life: Empirical implications," Journal of Health Economics, Elsevier, vol. 13(1), pages 111-118, March.
- Martin Browning & P.A. Chiappori, 1996.
"Efficient Intra-Household Allocations - A General Characterization and Empirical Tests,"
96-10, University of Copenhagen. Department of Economics.
- M. Browning & P. A. Chiappori, 1998. "Efficient Intra-Household Allocations: A General Characterization and Empirical Tests," Econometrica, Econometric Society, vol. 66(6), pages 1241-1278, November.
- Browning, M. & Chiappori, P.A., 1994. "Efficient Intra-Household allocations: A General Characterization and Empirical Tests," DELTA Working Papers 94-16, DELTA (Ecole normale supérieure).
- Martin Browning & Pierre-Andre Chiappori, 1994. "Efficient Intra-Household Allocations: a General Characterization and Empirical Tests," Department of Economics Working Papers 1994-02, McMaster University.
- McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
- Richard T. Carson, 2011.
Edward Elgar Publishing, number 2489.
- Jones-Lee, M W, 1991. "Altruism and the Value of Other People's Safety," Journal of Risk and Uncertainty, Springer, vol. 4(2), pages 213-19, April.
- Quiggin, John, 1992. "Risk, self-protection and ex ante economic value--some positive results," Journal of Environmental Economics and Management, Elsevier, vol. 23(1), pages 40-53, July.
- Lundberg, S. & Pollak, R.A., 1991.
"Separate Spheres Bargaining and the Marriage Market,"
Discussion Papers in Economics at the University of Washington
91-08, Department of Economics at the University of Washington.
- Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
- Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Working Papers 91-08, University of Washington, Department of Economics.
- Timothy J. Bartik, 2008.
"Evaluating the Benefits of Non-marginal Reductions in Pollution Using Information on Defensive Expenditures,"
Book chapters authored by Upjohn Institute researchers,
in: Joseph Herriges & Catherine L. Kling (ed.), Revealed Preference Approaches to Environmental Valuation, volume 0, pages 459-475
W.E. Upjohn Institute for Employment Research.
- Bartik, Timothy J., 1988. "Evaluating the benefits of non-marginal reductions in pollution using information on defensive expenditures," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 111-127, March.
- Saku Aura, 2002.
"Does the Balance of Power Within a Family Matter? The Case of the Retirement Equity Act,"
CESifo Working Paper Series
734, CESifo Group Munich.
- Aura, Saku, 2005. "Does the balance of power within a family matter? The case of the Retirement Equity Act," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1699-1717, September.
- Saku Aura, . "Does the balance of power within a family matter? The case of the Retirement Equity Act," Working Papers 202, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- John Quiggin, 1998. "Individual and Household Willingness to Pay for Public Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 58-63.
- Ted Bergstrom, 1994.
"A Survey of Theories of the Family,"
Labor and Demography
9401001, EconWPA, revised 10 Oct 1994.
- Shelly Lundberg & Robert A. Pollak, 2001.
"Efficiency in Marriage,"
NBER Working Papers
8642, National Bureau of Economic Research, Inc.
- Jones-Lee, M W, 1992. "Paternalistic Altruism and the Value of Statistical Life," Economic Journal, Royal Economic Society, vol. 102(410), pages 80-90, January.
- Zhiqi Chen & Frances Woolley, 1999.
"A Cournot-Nash Model of Family Decision Making,"
Carleton Economic Papers
99-13, Carleton University, Department of Economics, revised Oct 2001.
- Richard Carson & Nicholas Flores & Norman Meade, 2001.
"Contingent Valuation: Controversies and Evidence,"
Environmental & Resource Economics,
Springer;European Association of Environmental and Resource Economists, vol. 19(2), pages 173-210, June.
- Carson, Richard T & Flores, Nicholas A, 2000. "Contingent Valuation: Controversies and Evidence," University of California at San Diego, Economics Working Paper Series qt75k752s7, Department of Economics, UC San Diego.
- Siwan Anderson & Jean-Marie Baland, 2002.
"The Economics of Roscas and Intrahousehold Resource Allocation,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 117(3), pages 963-995.
- Anderson, K.S. & Baland, J-M., 2000. "The Economics of Roscas and Intra-Household Resource Allocation," Discussion Paper 2000-83, Tilburg University, Center for Economic Research.
- Siwan Anderson, 2000. "The Economics of Roscas and Intra-Household Resource Allocation," Econometric Society World Congress 2000 Contributed Papers 1323, Econometric Society.
When requesting a correction, please mention this item's handle: RePEc:hhs:osloec:2002_028. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Magnus Gabriel Aase)
If references are entirely missing, you can add them using this form.