SHARING RULE IDENTIFICATION FOR GENERAL COLLECTIVE CONSUMPTION MODELS

We propose a method to set identify bounds on the sharing rule for a general collective household consumption model. Unlike the effects of distribution factors, the level of the sharing rule cannot be uniquely identified without strong assumptions on preferences across households. Our new results sh...

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Bibliographic Details
Published in:Econometrica 2015-09, Vol.83 (5), p.2001-2041
Main Authors: Cherchye, Laurens, De Rock, Bram, Lewbel, Arthur, Vermeulen, Frederic
Format: Article
Language:English
Subjects:
bounds
Children
Collective model
Collectivism
consumer demand
Consumption
Decision making models
Demand curves
Economic models
Family income
Household consumption
Households
Housing demand
identification
Income estimates
Income shares
Modeling
Poverty
Recreation
revealed preferences
sharing rule
Studies
United States
Utility functions
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Summary:We propose a method to set identify bounds on the sharing rule for a general collective household consumption model. Unlike the effects of distribution factors, the level of the sharing rule cannot be uniquely identified without strong assumptions on preferences across households. Our new results show that, though not point identified without these assumptions, strong bounds on the sharing rule can be obtained. We get these bounds by applying revealed preference restrictions implied by the collective model to the household's continuous aggregate demand functions. We obtain informative bounds even if nothing is known about whether each good is public, private, or assignable within the household, though having such information tightens the bounds. We apply our method to US PSID data, obtaining narrow bounds that yield useful conclusions regarding the effects of income and wages on intrahousehold resource sharing, and on the prevalence of individual (as opposed to household level) poverty.
ISSN:0012-9682
1468-0262
DOI:10.3982/ecta10839