Unitary or collective households? A nonparametric rationality and separability test using detailed data on consumption expenditures and time use

Abstract

We document a nonparametric test for weak separability between time use and consumption goods applied to unique time-use data on Belgian singles and households. The test outcomes reject the hypothesis of weak separability, indicating that household consumption decisions are not made independent from time-use allocations. Second, we conduct a nonparametric evaluation of unitary and collective rationality tests under a comprehensive setting studying choices on both private and public consumption in combination with time spent on labour supply and domestic work. This makes the analysis less vulnerable to separability issues and obtains a more realistic description of household trade-offs between consumption and time use (i.e. leisure and domestic work) than does the existing work. Moreover, our analysis uses nonparametric revealed preference tools and abstains from imposing functional form assumptions on the individual utilities and the household decision process. The outcomes confirm previous findings validating the use of collective models to analyse multi-member decision making. Lastly, we show the robustness of our outcomes to settings typically considered in existing work (missing detailed time-use information).