We compare the empirical performance of unitary and collective labor supply models, using representative data from the Dutch DNB Household Survey. We conduct a nonparametric analysis that avoids the distortive impact of an erroneously specified functional form for the preferences and/or the intrahousehold bargaining process. Our analysis focuses on the goodness of fit of the two behavioral models. To guarantee a fair comparison, we complement this goodness-of-fit analysis with a power analysis. Our results strongly favor the collective approach to modeling the behavior of multiperson households.

We provide a nonparametric characterization of a general collective model for household consumption, which includes externalities and public consumption. Next, we establish testable necessary and sufficient conditions for data consistency with collective rationality that only include observed price and quantity information. These conditions have a similar structure as the generalized axiom of revealed preference for the unitary model, which is convenient from a testing point of view. In addition, we derive the minimum number of goods and observations that enable the rejection of collectively rational household behavior.

We provide “revealed preference” tests of general collective consumption models that account for public consumption and externalities within the household. We further propose a novel approach to model special cases of this model, which imply alternative assumptions regarding the sharing rule. Our application uses the panel data from the Russia Longitudinal Monitoring Survey. We find that the general model, together with a large class of special cases, cannot be rejected. By contrast, we do reject the standard unitary model. Since our tests are entirely nonparametric, this provides strong evidence in favor of models focusing on intrahousehold decision making.

We propose a collective labor supply model with household production that generalizes a model of Blundell, Chiappori and Meghir (2005). Adults'preferences not only depend on own leisure and individual private consumption of market goods. They also depend on the consumption of domestic goods, which are produced by combining market goods with individuals'time. A new identification result, which uses production shifters, is developed. We apply our model to unique data on Dutch couples with children. Our application uses a novel estimation strategy that builds upon the familiar two-stage allocation representation of the collective model.

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.

We propose a novel nonparametric method to empirically identify economies of scale in multiperson household consumption. We assume consumption technologies that define the public and private nature of expenditures through Barten scales. Our method (solely) exploits preference information revealed by a cross-section of household observations while accounting for fully unobserved preference heterogeneity. An application to data drawn from the US Panel Study of Income Dynamics shows that the method yields informative results on scale economies and intrahousehold allocation patterns. In addition, it allows us to define individual compensation schemes required to preserve the same consumption level in case of marriage dissolution or spousal death.

We develop a novel framework to analyze the structural implications of the marriage market for household consumption. We define a revealed preference characterization of efficient household consumption when the marriage is stable. We characterize stable marriage with intrahousehold (consumption) transfers but without assuming transferable utility. Our revealed preference characterization generates testable conditions even with a single observation per household and heterogeneous individual preferences across households. The characterization also allows for identifying the intrahousehold decision structure (including the sharing rule) under the same minimalistic assumptions. An application to Dutch household data illustrates the usefulness of our theoretical results.