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Tricks for maximizing collective utility functions

Author

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  • Elisa Pagani

    () (Department of Economics (University of Verona))

Abstract

This paper compares di erent centralized collective models for maximizing the utility of a household from the point of view of the single members that compose it. We describe the collective maximization program as a vector optimization problem and analyze the household welfare and Pareto speci cation as special scalar cases. The comparisons of these programs reveals interesting relationships among the Lagrangian multiplier and the sharing rule parameters. We also generalize a multiobjective dual problem that leads to the characterization of the individual shares of total income. Hence, we have a measure of the distribution of wealth inside the household.

Suggested Citation

  • Elisa Pagani, 2013. "Tricks for maximizing collective utility functions," Working Papers 02/2013, University of Verona, Department of Economics.
  • Handle: RePEc:ver:wpaper:02/2013
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    File URL: http://dse.univr.it/home/workingpapers/wp2013n2.pdf
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    References listed on IDEAS

    as
    1. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    2. Martina Menon & Elisa Pagani & Federico Perali, 2012. "A Characterization of Collective Individual Expenditure Functions," Working Papers 20/2012, University of Verona, Department of Economics.
    3. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    4. Elisa Pagani, 2009. "On Lagrangian Duality in Vector Optimization. Applications to the linear case," Working Papers 59/2009, University of Verona, Department of Economics.
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    Cited by:

    1. 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.

    More about this item

    Keywords

    Collective Household Model; Vector Optimization Problems; Scalarization; Vector Duality.;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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