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Kinky Choices, Dictators and Split Might : A Non-Cooperative Model for Household Consumption and Labor Supply

Author

Listed:
  • Boone, J.

    (Tilburg University, Center For Economic Research)

  • van der Wiel, K.M.

    (Tilburg University, Center For Economic Research)

  • Vermeulen, F.M.P.

    (Tilburg University, Center For Economic Research)

Abstract

We model consumption and labor supply behavior of a couple in a non-cooperative setting. Using minimal assumptions, we prove that demand for public goods is characterized by three regimes. It is either determined by the preferences of one of the partners only (Husband Dictatorship or Wife Dictatorship), or by both spouses’ preferences, in which case each partner’s influence depends on the relative wage rates (Split Might). The model is illustrated empirically using a sample drawn from the Consumer Expenditure Survey (CEX) where expenditures on children’s goods are a public good in both spouses’ preferences. It turns out that the spending pattern reflects the husband’s preferences in about 54% of the couples in our sample. Still, in an important minority of the households (about 45%), the wife acts as a dictator. Somewhat less than 1% of the couples is characterized by a split might regime.
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Suggested Citation

  • Boone, J. & van der Wiel, K.M. & Vermeulen, F.M.P., 2009. "Kinky Choices, Dictators and Split Might : A Non-Cooperative Model for Household Consumption and Labor Supply," Discussion Paper 2009-53, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:c676a180-63ce-48c1-bd51-e6d1683a8199
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    Cited by:

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    3. Laurens Cherchye & Sam Cosaert & Thomas Demuynck & Bram De Rock, 2020. "Group Consumption with Caring Individuals," The Economic Journal, Royal Economic Society, vol. 130(627), pages 587-622.
    4. Bautista Lacambra, Sergio, 2020. "Household labor supply: Collective results for certain developed countries," MPRA Paper 101514, University Library of Munich, Germany.

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    More about this item

    Keywords

    Consumption; labor supply; intra-household allocation; non-cooperative model; public goods;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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