Intrahousehold Economies of Scale with Application to Food Assistance and Work Incentive Programs

Comparing income levels across families with different household compositions and sizes is not easy and has been a long‐term focus in welfare and policy analysis. This paper evaluates the extent childless two‐person households in the U.S. reduce their costs by living together relative to living alon...

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Bibliographic Details
Published in:American journal of agricultural economics 2021-08, Vol.103 (4), p.1251-1267
Main Authors: Li, Wenying, Dorfman, Jeffrey H.
Format: Article
Language:English
Subjects:
Agricultural economics
Childlessness
Collective household model
D12
D13
Economies of scale
EITC
Expenditures
food assistance
household resource sharing
Households
I32
I38
Income
indifference scale
Living alone
Policy analysis
Poverty
Q18
SNAP
Welfare
Women
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Summary:Comparing income levels across families with different household compositions and sizes is not easy and has been a long‐term focus in welfare and policy analysis. This paper evaluates the extent childless two‐person households in the U.S. reduce their costs by living together relative to living alone. Using a structural collective household model and household scanner data, we find women, on average, consume 48% of total household expenditures, and a woman (man) living alone would need approximately 65% (63%) of the two‐person household's income to reach the same living standard as attained as a member of a two‐person household. Our results suggest the poverty line for two‐person childless households may need to be increased, whereas other federal benefit calculations are overly generous.
ISSN:0002-9092
1467-8276
DOI:10.1111/ajae.12187