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Economies of Scale to Consumption in Collective Households

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Abstract

Browning et al. (2013) model collective-household economies of scale in goods consumption by having each good be partly shared, instead of each good being public or private. We modify their model to achieve simple point identification and estimation of the economies of scale of consumption of each good, and we provide a new index of household level economies of scale. Our model has a linear form, permits households of varying composition, including children, and accommodates unobserved heterogeneity in both preferences and in the economies of scale of each good. We provide estimates using Canadian Surveys of Household Spending data.

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  • Hsin-Yuan Hsieh, Arthur Lewbel and Krishna Pendakur, 2026. "Economies of Scale to Consumption in Collective Households," Discussion Papers dp26-03, Department of Economics, Simon Fraser University.
    • Handle: RePEc:sfu:sfudps:dp26-03
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