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The Intrahousehold Allocation of Private and Public Consumption: Theory and Evidence from U.S. Data

  • Donni, Olivier

    ()

    (University of Cergy-Pontoise)

We adopt the collective approach to consumer behavior with egoistic agents, and assume that the household consumption is either private or public. We then show that (i) household demands have to satisfy testable constraints and (ii) some elements of the decision process can be retrieved from observed behavior. These results are based on a conditional demand (‘m-demand’) framework in which household demands are directly derived from the marginal rates of substitution. Finally, we present an empirical application using the U.S. Consumer Expenditure Survey. Overall, the data turn out to be consistent with the theoretical model.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2137.

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Length: 45 pages
Date of creation: May 2006
Date of revision:
Publication status: published as "A Simple Approach to Investigate Intrahousehold Allocation of Private and Public Goods" in: Review of Economics and Statistics, 2009, 91 (3), 617-628
Handle: RePEc:iza:izadps:dp2137
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  1. Madden, Paul, 1991. "A Generalization of Hicksian q Substitutes and Complements with Application to Demand Rationing," Econometrica, Econometric Society, vol. 59(5), pages 1497-508, September.
  2. Olivier Donni & Nicolas Moreau, 2005. "Collective Labor Supply: a Single-Equation Model and Some Evidence from French Data," Cahiers de recherche 0516, CIRPEE.
  3. Frederic Vermeulen, 2000. "Collective household models: principles and main results," Public Economics Working Paper Series ces0028, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
  4. Joseph Altonji, 1984. "Intertemporal Substitution in Labor Supply: Evidence from Micro Data," Working Papers 562, Princeton University, Department of Economics, Industrial Relations Section..
  5. repec:ner:tilbur:urn:nbn:nl:ui:12-3106943 is not listed on IDEAS
  6. Helene Couprie, 2003. "Time allocation within the family: welfare implications of life in a couple," Labor and Demography 0312003, EconWPA.
  7. Richard Blundell & Pierre-Andr� Chiappori & Costas Meghir, 2005. "Collective Labor Supply with Children," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1277-1306, December.
  8. Martin Browning & P.A. Chiappori, 1996. "Efficient Intra-Household Allocations - A General Characterization and Empirical Tests," Discussion Papers 96-10, University of Copenhagen. Department of Economics.
  9. 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.
  10. Neary, J. P. & Roberts, K. W. S., 1980. "The theory of household behaviour under rationing," European Economic Review, Elsevier, vol. 13(1), pages 25-42, January.
  11. Maurizio Mazzocco, 2004. "Individual Euler Equations Rather Than Household Euler Equations," Econometric Society 2004 North American Summer Meetings 497, Econometric Society.
  12. Martin Browning & Pierre-André Chiappori & Arthur Lewbel, . "Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power," CAM Working Papers 2003-12, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics, revised Dec 2003.
  13. repec:cup:cbooks:9780521497695 is not listed on IDEAS
  14. Dauphin, Anyck & Fortin, Bernard, 2000. "A Test of Collective Rationality for Multi-Person Households," Cahiers de recherche 0005, Université Laval - Département d'économique.
  15. Olivier Donni, 2006. "Collective consumption and welfare," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 124-144, February.
  16. Newey, Whitney K & West, Kenneth D, 1987. "Hypothesis Testing with Efficient Method of Moments Estimation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(3), pages 777-87, October.
  17. Bourguignon, F. & Browning, M. & Chiappori, P.A. & Lechene, V., 1992. "Intra Household Allocation of Consumption : A Model and Some Evidence from French Data," DELTA Working Papers 92-08, DELTA (Ecole normale supérieure).
  18. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  19. Nelson, Julie A, 1988. "Household Economies of Scale in Consumption: Theory and Evidence," Econometrica, Econometric Society, vol. 56(6), pages 1301-14, November.
  20. Meghir, Costas & Weber, Guglielmo, 1996. "Intertemporal Nonseparability or Borrowing Restrictions? A Disaggregate Analysis Using a U.S. Consumption Panel," Econometrica, Econometric Society, vol. 64(5), pages 1151-81, September.
  21. Slesnick, Daniel T, 1993. "Gaining Ground: Poverty in the Postwar United States," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 1-38, February.
  22. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
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