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Journal of Political Economy Vol. 117 No. 6 2009

Opening the Black Box of Intrahousehold Decision Making: Theory and Nonparametric Empirical Tests of General Collective Consumption Models

Laurens Cherchye1,2,3; Bram De Rock; Frederic Vermeulen1,4

1 Tilburg University · 2 IZA - Institute of Labor Economics · 3 KU Leuven · 4 Network for Studies on Pensions, Aging and Retirement

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Abstract

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.

DOI
10.1086/649563
Volume
117
Issue
6
Pages
1074-1104
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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