IDEAS home Printed from https://ideas.repec.org/p/rtv/ceisrp/28.html
   My bibliography  Save this paper

Estimation of the Sharing Rule Between Adults and Children and Related Equivalence Scales Within a Collective Consumption Framework

Author

Listed:
  • Vincenzo Atella

    (University of Rome II - Faculty of Economics)

  • Carlos Arias

    (Universidad de Le—n)

  • Federico Perali

    (University of Verona - Department of Economics)

  • Raffaella Castagnini

    (World Bank)

Abstract

In order to determine how much money is needed to make each household member as well off as they were before a change in living conditions, equivalence scales should be defined on the basis of individual rather than household welfare. This requires the knowledge of individual utilities that are derivable from the identification of the rule governing the intra-household allocation of resources within a collective approach. We pursue this objective using information about male, female and children clothing expenditure present in the 1999 Italian Household budget survey within the estimation of a complete demand system. The sharing rule between adults and children is estimated using a structural rather than a reduced form approach. Maximum simulated likelihood is used to estimate a collective model of individual demand equations with zero expenditures for the exclusive good clothing. The recovery of individual utilities for adults and children permits the estimation of the cost of children taking the intra-household distribution of resources into account. We show that the cost of Italian children is significantly affected by the parents' aversion to intra-household inequality.

Suggested Citation

  • Vincenzo Atella & Carlos Arias & Federico Perali & Raffaella Castagnini, 2003. "Estimation of the Sharing Rule Between Adults and Children and Related Equivalence Scales Within a Collective Consumption Framework," CEIS Research Paper 28, Tor Vergata University, CEIS.
    • Handle: RePEc:rtv:ceisrp:28
    as

    Download full text from publisher

    File URL: https://ceistorvergata.it/RePEc/rpaper/No-28-Arias,Atella,Castagnini,Perali.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. BLACKORBY, Charles & BOSSERT, Walter, 2004. "Interpersonal Comparisons of Well-Being," Cahiers de recherche 2004-06, Universite de Montreal, Departement de sciences economiques.
    2. Richard Blundell & Pierre-Andre Chiappori & Thierry Magnac & Costas Meghir, 2007. "Collective Labour Supply: Heterogeneity and Non-Participation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(2), pages 417-445.
    3. Pendakur, Krishna, 1998. "Semiparametric estimates and tests of base-independent equivalence scales," Journal of Econometrics, Elsevier, vol. 88(1), pages 1-40, November.
    4. Borsch-Supan, Axel & Hajivassiliou, Vassilis A., 1993. "Smooth unbiased multivariate probability simulators for maximum likelihood estimation of limited dependent variable models," Journal of Econometrics, Elsevier, vol. 58(3), pages 347-368, August.
    5. FranÚois Bourguignon, 1999. "The cost of children: May the collective approach to household behavior help?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(4), pages 503-521.
    6. Carlos Arias & Thomas Cox, 2001. "Estimation of a US dairy sector model by maximum simulated likelihood," Applied Economics, Taylor & Francis Journals, vol. 33(9), pages 1201-1211.
    7. Gronau, Reuben, 1997. "The Theory of Home Production: The Past Ten Years," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 197-205, April.
    8. Hajivassiliou, Vassilis & McFadden, Daniel & Ruud, Paul, 1996. "Simulation of multivariate normal rectangle probabilities and their derivatives theoretical and computational results," Journal of Econometrics, Elsevier, vol. 72(1-2), pages 85-134.
    9. Margaret Grosh & Paul Glewwe, 2000. "Designing Household Survey Questionnaires for Developing Countries," World Bank Publications - Books, The World Bank Group, number 25338.
    10. Richard Blundell & Alan Duncan, 1998. "Kernel Regression in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 62-87.
    11. Richard Blundell & Alan Duncan & Krishna Pendakur, 1998. "Semiparametric estimation and consumer demand," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(5), pages 435-461.
    12. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    13. Arthur Lewbel, 1985. "A Unified Approach to Incorporating Demographic or Other Effects into Demand Systems," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(1), pages 1-18.
    14. Mroz, Thomas A, 1987. "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," Econometrica, Econometric Society, vol. 55(4), pages 765-799, July.
    15. C. Andrea Bollino & Federico Perali & Nicola Rossi, 2000. "Linear household technologies," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(3), pages 275-287.
    16. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    17. Vincenzo Atella & Martina Menon & Federico Perali, 2003. "Estimation of Unit Values in Cross Sections without Quantity Information and Implications for Demand and Welfare Analysis," CEIS Research Paper 12, Tor Vergata University, CEIS.
    18. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    19. Lewbel, Arthur, 1991. "Cost of characteristics indices and household equivalence scales," European Economic Review, Elsevier, vol. 35(6), pages 1277-1293, August.
    20. Pollak, Robert A & Wales, Terence J, 1981. "Demographic Variables in Demand Analysis," Econometrica, Econometric Society, vol. 49(6), pages 1533-1551, November.
    21. F. Pedrali, 2002. "Can PIGLOG Preferences Identify Equivalence Scales ?," THEMA Working Papers 2002-03, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    22. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
    23. Lyssiotou, Panayiota & Pashardes, Panos & Stengos, Thanasis, 1999. "Testing the rank of Engel curves with endogenous expenditure," Economics Letters, Elsevier, vol. 64(1), pages 61-65, July.
    24. Arias, Carlos & Cox, Thomas L., 1999. "Maximum Simulated Likelihood: A Brief Introduction For Practitioners," Staff Papers 12662, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    25. Goldberger, Arthur S, 1972. "Maximum-Likelihood Estimation of Regressions Containing Unobservable Independent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(1), pages 1-15, February.
    26. Stern, Steven, 1992. "A Method for Smoothing Simulated Moments of Discrete Probabilities in Multinomial Probit Models," Econometrica, Econometric Society, vol. 60(4), pages 943-952, July.
    27. Federico Perali & Jean-Paul Chavas, 2000. "Estimation of Censored Demand Equations from Large Cross-Section Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1022-1037.
    28. 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.
    29. Gozalo, Pedro L., 1997. "Nonparametric bootstrap analysis with applications to demographic effects in demand functions," Journal of Econometrics, Elsevier, vol. 81(2), pages 357-393, December.
    30. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-694, July.
    31. Lewbel, Arthur, 1989. "Household equivalence scales and welfare comparisons," Journal of Public Economics, Elsevier, vol. 39(3), pages 377-391, August.
    32. Carlos Arias & THOMAS L. COX, 1999. "Maximum Simulated Likelihood: A Brief Introduction for Practitioners," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 421, Wisconsin-Madison Agricultural and Applied Economics Department.
    33. Antonella Caiumi & Federico Perali, 1999. "Children And Intrahousehold Distribution Of Resources: An Estimate Of The Sharing Rule Of Italian Households," CHILD Working Papers wp07_00, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Antonella Caiumi & Federico Perali, 2015. "Who bears the full cost of children? Evidence from a collective demand system," Empirical Economics, Springer, vol. 49(1), pages 33-64, August.
    2. Chavas, Jean-Paul & Menon, Martina & Pagani, Elisa & Perali, Federico, 2018. "Collective household welfare and intra-household inequality," Theoretical Economics, Econometric Society, vol. 13(2), May.
    3. Eleftherios Giovanis & Oznur Ozdamar, 2018. "Empirical Application of Collective Household Labour Supply Model in Iraq," Working Papers 1180, Economic Research Forum, revised 19 Apr 2018.
    4. Martina Menon & Federico Perali & Luca Piccoli, 2018. "Collective consumption: an application to the passive drinking effect," Review of Economics of the Household, Springer, vol. 16(1), pages 143-169, March.
    5. Mangiavacchi, Lucia & Perali, Federico & Piccoli, Luca, 2018. "Intrahousehold Distribution In Migrant-Sending Families," Journal of Demographic Economics, Cambridge University Press, vol. 84(1), pages 107-148, March.
    6. Eleonora Matteazzi & Martina Menon & Federico Perali, 2017. "The Collective Farm-household Model: Policy and Welfare Simulations," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 39(1), pages 111-153.
    7. Martina Menon & Federico Perali & Marcella Veronesi, 2014. "Recovering Individual Preferences for Non-Market Goods: A Collective Travel-Cost Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(2), pages 438-457.
    8. Martina Menon & Federico Perali, 2012. "The Sharing Rule: Where Is It?," Working Papers 16/2012, University of Verona, Department of Economics.
    9. Donni, Olivier & Molina, José Alberto, 2018. "Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence," IZA Discussion Papers 11915, Institute of Labor Economics (IZA).
    10. Martina Menon & Federico Perali & Luca Piccoli, 2008. "The passive drinking effect: Evidence from Italy," Working Papers halshs-00586686, HAL.
    11. Elisa Meneghello & Martina Menon & Federico Perali & Furio Rosati, 2022. "The Shadow Wage of Child Labor: An application to Nepal," Working Papers 8, SITES.
    12. M. Menon & F. Perali & F. Rosati, 2005. "The Shadow Wage of Child Labour: An Application to Nepal," UCW Working Paper 11, Understanding Children's Work (UCW Programme).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antonella Caiumi & Federico Perali, 2015. "Who bears the full cost of children? Evidence from a collective demand system," Empirical Economics, Springer, vol. 49(1), pages 33-64, August.
    2. Echeverría, Lucía & Menon, Martina & Perali, Federico & Berges, Miriam, 2019. "Intra-household inequality and child welfare in Argentina," Nülan. Deposited Documents 3051, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    3. Lucia Mangiavacchi & Luca Piccoli, 2009. "Child welfare and intra-household inequality in Albania," Working Papers 149, ECINEQ, Society for the Study of Economic Inequality.
    4. Martina Menon & Federico Perali, 2012. "The Sharing Rule: Where Is It?," Working Papers 16/2012, University of Verona, Department of Economics.
    5. Echeverría, Lucía, 2020. "Modelos colectivos de consumo y distribución intra-hogar. Teoría y aplicaciones," Nülan. Deposited Documents 3832, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    6. Martina Menon & Federico Perali & Luca Piccoli, 2008. "The passive drinking effect: Evidence from Italy," Working Papers halshs-00586686, HAL.
    7. Sara Borelli & Federico Perali, 2003. "Drug Consumption and Intra-Household Distribution of Resources: The Case of Qat in an African Society," CHILD Working Papers wp06_03, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    8. Martina Menon & Federico Perali & Luca Piccoli, 2018. "Collective consumption: an application to the passive drinking effect," Review of Economics of the Household, Springer, vol. 16(1), pages 143-169, March.
    9. Chau, Tak Wai & Li, Hongbin & Liu, Pak Wai & Zhang, Junsen, 2007. "Testing the collective model of household labor supply: Evidence from China," China Economic Review, Elsevier, vol. 18(4), pages 389-402.
    10. Olivier Donni, 2007. "Collective female labour supply: theory and application," Economic Journal, Royal Economic Society, vol. 117(516), pages 94-119, January.
    11. Olivier Bargain & Olivier Donni, 2009. "Revisiting the cost of children : theory and evidence from Ireland," Open Access publications 10197/2014, School of Economics, University College Dublin.
    12. Perali, Federico, 2008. "The second Engel law: Is it a paradox?," European Economic Review, Elsevier, vol. 52(8), pages 1353-1377, November.
    13. Mangiavacchi, Lucia & Piccoli, Luca, 2011. "Improving the measurement of child welfare in the context of intra-household inequality," Children and Youth Services Review, Elsevier, vol. 33(2), pages 226-232, February.
    14. Donaldson, David & Pendakur, Krishna, 2004. "Equivalent-expenditure functions and expenditure-dependent equivalence scales," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 175-208, January.
    15. Fabrizio Balli, 2012. "Are Traditional Equivalence Scales Still Useful? A Review and A Possible Answer," Department of Economics University of Siena 656, Department of Economics, University of Siena.
    16. Vincenzo Atella & Jay Coggins & Federico Perali, 2005. "Aversion to inequality in Italy and its determinants," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 2(2), pages 117-144, January.
    17. Lewbel, Arthur & Lin, Xirong, 2022. "Identification of semiparametric model coefficients, with an application to collective households," Journal of Econometrics, Elsevier, vol. 226(2), pages 205-223.
    18. Eleftherios Giovanis & Oznur Ozdamar, 2019. "A Collective Household Labour Supply Model with Disability: Evidence from Iraq," Journal of Family and Economic Issues, Springer, vol. 40(2), pages 209-225, June.
    19. Cherchye, Laurens & Cosaert, Sam & De Rock, Bram & Kerstens, Pieter Jan & Vermeulen, Frederic, 2018. "Individual welfare analysis for collective households," Journal of Public Economics, Elsevier, vol. 166(C), pages 98-114.
    20. Rana Hendy & Catherine Sofer, 2010. "A Collective Model of Female Labor Supply : Do Distribution Factors Matter in the Egyptian Case ?," Post-Print halshs-00482492, HAL.

    More about this item

    Keywords

    Collective Approach; Sharing Rule; Clothing; Equivalence Scales;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • D10 - Microeconomics - - Household Behavior - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rtv:ceisrp:28. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Barbara Piazzi (email available below). General contact details of provider: https://edirc.repec.org/data/csrotit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.