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A Public Good Version of the Collective Household Model: An Empirical Approach with an Application to British Household Data

  • van Klaveren, Chris

    ()

    (Maastricht University)

  • van Praag, Bernard M. S.

    ()

    (University of Amsterdam)

  • Maassen van den Brink, Henriette

    ()

    (University of Amsterdam)

In this paper we consider an empirical collective household model of time allocation for two-earner households. The novelty of this paper is that we estimate a version of the collective household model, where the internally produced goods and the externally purchased goods are assumed to be public. The empirical results suggest that: (1) Preferences of men and women differ; (2) Although there are significant individual variations, on average the utility functions of men and women are equally weighted in the household utility function; (3) Differences in the ratio of the partners' hourly wages are explanatory for how individual utilities are weighted in the household utility function. (4) The female's preference for household production is influenced by family size, but this does not hold for the male; (5) Both the male and the female have a backward-bending labor supply curve; (6) Labor-supply curves are forward-bending with respect to the partner's wage rate; (7) Our model rejects the unitary Slutsky symmetry condition.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3274.

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Length: 37 pages
Date of creation: Jan 2008
Date of revision:
Publication status: published in: Review of Economics of the Household, 2008, 6 (2), 169-191
Handle: RePEc:iza:izadps:dp3274
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  1. 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).
  2. Chiappori, Pierre-Andre, 1997. "Introducing Household Production in Collective Models of Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 191-209, February.
  3. Benoît Rapoport & Catherine Sofer & Anne Solaz, 2011. "Household production in a collective model: some new results," Journal of Population Economics, Springer, vol. 24(1), pages 23-45, January.
  4. Wales, T. J. & Woodland, A. D., 1983. "Estimation of consumer demand systems with binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 21(3), pages 263-285, April.
  5. Thomas, D., 1989. "Intra-Household Resource Allocation: An Inferential Approach," Papers 586, Yale - Economic Growth Center.
  6. 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.
  7. Martin Browning & Pierre-André Chiappori & Valérie Lechene, 2006. "Collective and Unitary Models: A Clarification," Review of Economics of the Household, Springer, vol. 4(1), pages 5-14, 03.
  8. Martin Browning & Mette Gortz, 2006. "Spending time and money within the household," Economics Series Working Papers 288, University of Oxford, Department of Economics.
  9. Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, vol. 35(3), pages 355-369, April.
  10. Frederic VERMEULEN, 2000. "Collective Household Models: Principles and Main Results," Center for Economic Studies - Discussion papers ces0028, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  11. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
  12. Kooreman, Peter & Kapteyn, Arie, 1987. "A Disaggregated Analysis of the Allocation of Time within the Household," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 223-49, April.
  13. Grossbard-Shechtman, Shoshana Amyra, 1984. "A Theory of Allocation of Time in Markets for Labour and Marriage," Economic Journal, Royal Economic Society, vol. 94(376), pages 863-82, December.
  14. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier.
  15. Richard Blundell & Pierre-Andre Chiappori & Thierry Magnac & Costas Meghir, 2002. "Collective Labor Supply: Heterogeneity and Nonparticipation," Research Unit Working Papers 0210, Laboratoire d'Economie Appliquee, INRA.
  16. 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.
  17. Emmanuel Duguet & Véronique Simonnet, 2007. "Labor market participation in France: an asymptotic least squares analysis of couples’ decisions," Review of Economics of the Household, Springer, vol. 5(2), pages 159-179, June.
  18. P.-A. Chiappori & I. Ekeland, 2009. "The Microeconomics of Efficient Group Behavior: Identification," Econometrica, Econometric Society, vol. 77(3), pages 763-799, 05.
  19. Olivier Donni & Nicolas Moreau, 2005. "Collective Labor Supply: a Single-Equation Model and Some Evidence from French Data," Cahiers de recherche 0516, CIRPEE.
  20. Apps, P.F. & Rees, R., 1996. "Collective Labor Supply and Household Production," Papers 301, Australian National University - Department of Economics.
  21. Lundberg, S.J. & Pollak, R.A. & Wales, T.J., 1994. "Do Husbands and Wives Pool Their Resources? Evidence from U.K. Child Benefit," Discussion Papers in Economics at the University of Washington 94-6, Department of Economics at the University of Washington.
  22. Helene Couprie, 2003. "Time allocation within the family: welfare implications of life in a couple," Labor and Demography 0312003, EconWPA.
  23. Patricia F. Apps & Ray Rees, 1999. "Individual versus Joint Taxation in Models with Household Production," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 393-403, April.
  24. Fortin, Bernard & Lacroix, Guy, 1997. "A Test of the Unitary and Collective Models of Household Labour Supply," Economic Journal, Royal Economic Society, vol. 107(443), pages 933-55, July.
  25. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  26. Rees, Ray, 1988. "Taxation and the Household," Munich Reprints in Economics 3411, University of Munich, Department of Economics.
  27. Shoshana Grossbard, 2005. "Women's Labor Supply, Marriage, and Welfare Dependency," LABOUR, CEIS, vol. 19(s1), pages 211-241, December.
  28. repec:bla:restud:v:74:y:2007:i:2:p:417-445 is not listed on IDEAS
  29. Robert A. Pollak, 2005. "Bargaining Power in Marriage: Earnings, Wage Rates and Household Production," NBER Working Papers 11239, National Bureau of Economic Research, Inc.
  30. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
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