Collective Household Model Research Articles

Family bargaining over parental leave: A collective household model with endogenous gender power

AbstractAlthough existing studies have suggested that men's leave‐taking positively affects children's development and their involvement in childcare and household chores in the long run, the underlying mechanism remains unclear. To shed light on this ambiguity, this study develops a dynamic collective household model and analyses household decisions on parental leave‐sharing between spouses, resource allocation, home production, and labour supply. We demonstrate that gender equality in bargaining positions within families before leave‐taking is crucial in explaining the positive impacts of men's leave‐taking. Specifically, if women's intrahousehold bargaining power before taking parental leave is sufficiently low, their husbands are unlikely to take leave, and women's positions may deteriorate after leave. Consequently, households may allocate fewer resources to children, and men may not actively participate in childcare and household chores. Our model suggests that implementing parental leave policies for both genders may not be sufficient; simultaneous measures to increase women's bargaining power are necessary to encourage men to take parental leave and maximize the policies' benefits.

Estimation of sharing rule: an application of intra-household collective model on Indian data

PurposeMany aspects of well-being depend critically on individual-level expenditure and consumption. The Millennium Development Goals include the promotion of gender equality and the empowerment of women, which partly have to do with women’s access to resources within households. Many important questions in labour, public and development economics also hinge on the intra-household distribution of resources. This paper aims to estimate the resource shares within a household in the rural and urban sectors of West Bengal through a collective household model, where each household member has a specific utility function. The sharing rule parameters, that determine the apportionment of resources between members within a household, are estimated in an intra-household collective framework. The analysis is based on a system of log-quadratic Engel curves estimated using the 68th round (2011–2012) household-level consumption expenditure data of the Indian National Sample Survey Office (NSSO) for rural and urban sectors separately for the state of West Bengal.Design/methodology/approachThe sharing rule parameters (that determine the apportionment of resources between members) within a household are estimated in an intra-household collective framework as suggested by Dunbar et al. (2013). The analysis is based on a Quadratic Almost Ideal Demand System (QUAIDS) estimated using the 68th round (2011–2012) household-level consumption expenditure data of the Indian NSSO.FindingsIn this paper, the authors estimate the sharing rule of total household expenditure between couples in a household in the state of West Bengal. They use a modified version of the QUAIDS and the 68th round (2011–2012) household-level consumer expenditure data provided by the NSSO. From the exercise, it emerges that on an average, the resource shares between husband and wife in a household is about 66:34% in the rural sector and about 60:40% in the urban sector. Based on a classification of households by the distribution of resource shares, where higher resource share for the husband is classified as “Husband dominated” and the reverse as “Wife dominated”, the percentage of “Husband dominated” households is much more in both sectors. This unequal distribution of resources may have far-reaching consequences on allocation of expenditure on the children of the household. The authors leave this exercise as a future project.Originality/valueThis paper is an attempt to estimate the sharing rule for households using NSSO consumption expenditure data. This paper also highlights the intra household unequal resource allocation through the sharing rule. They use a modified version of the QUAIDS and the 68th round (2011–2012) household-level consumer expenditure data provided by the NSSO. From the exercise, it emerges that on an average, the resource shares between husband and wife in a household is about 66:34% in the rural sector and about 60:40% in the urban sector. Based on a classification of households by the distribution of resource shares, where higher resource share for the husband is classified as “Husband dominated” and the reverse as “Wife dominated”, the percentage of “Husband dominated” households is much more in both sectors. This unequal distribution of resources may have far-reaching consequences on allocation of expenditure on the children of the household. The authors leave this exercise as a future project.

The more the poorer? Resource sharing and scale economies in large families

In large families, individuals must share resources with many others but may benefit from economies of scale. This paper studies individual consumption in different types of households, with a focus on family structures that are common in developing countries. Based on a collective household model, we develop a methodology to identify intra-household resource allocation and the extent of joint consumption. Unlike existing approaches, we do not require consumption data on single-person households, which are rare in low-income countries. We illustrate our methodology using data from Bangladesh and Mexico. We document intra-household consumption inequality in both countries and substantial economies of scale in consumption in Mexico but not Bangladesh. Using our estimates, we then compute poverty rates for men, women, and children. Contrary to existing poverty calculations that ignore either intra-household inequality or economies of scale in consumption, ours account for both dimensions.

Measuring Women's Empowerment in Collective Households

Measuring women's empowerment within families is challenging. Social scientists often rely on close-ended survey questions on women's participation in household decisions, domestic abuse, and autonomy to measure women's power and agency. Recent advances in family economics have allowed researchers to identify and estimate structural measures of women's power and resource control based on the collective household model. We provide a brief overview of this literature. We then apply machine learning techniques to answer the following questions: How do such measures compare to women's responses to close-ended survey questions? Which survey questions are most predictive of model-based estimates of women's empowerment?

Identification of unobserved distribution factors and preferences in the collective household model

This paper develops a non-parametric collective random utility model with a continuous choice of consumption and sharing. We allow for a heterogeneous population by introducing unobserved distribution factors and preferences that are non-separable in the stochastic household choice system. We provide necessary and sufficient conditions for invertibility with respect to the vector of unobserved heterogeneity. Further, we show non-parametric identification of each individual’s idiosyncratic preferences and Pareto weights from the distribution of observed choices. Based on this result we develop a non-parametric two-step estimation procedure and estimate individual counterfactuals in a collective labour supply model for households with children using the LISS panel.

Health Service Needs from a Household Perspective: An Empirical Study in Rural Empty Nest Families in Sinan and Dangyang, China.

This study aimed to explore the health service needs of empty nest families from a household perspective. A multistage random sampling strategy was conducted to select 1606 individuals in 803 empty nest households in this study. A questionnaire was used to ask each individual about their health service needs in each household. The consistency rate was calculated based on their consistent answers to the questionnaire. We used a collective household model to analyze individuals’ public health service needs on the family level. According to the results, individuals’ consistency rates of health service needs in empty nest households, such as diagnosis and treatment service (H1), chronic disease management service (H2), telemedicine care (H3), physical examination service (H4), health education service (H5), mental healthcare (H6), and traditional Chinese medicine service (H7) were 40.30%, 89.13%, 98.85%, 58.93%, 57.95%, 72.84%, and 63.40%, respectively. Therefore, family-level health service needs could be studied from a family level. Health service needs of H1, H3, H4, H5, and H7 for individuals in empty nest households have significant correlations with each other (r = 0.404, 0.177, 0.286, 0.265, 0.220, p < 0.001). This will be helpful for health management in primary care in rural China; the concordance will alleviate the pressure of primary care and increase the effectiveness of doctor–patient communication. Health service needs in empty nest households who took individuals’ public needs as household needs (n = 746) included the H4 (43.3%) and H5 (24.9%) and were always with a male householder (94.0%) or at least one had chronic diseases (82.4%). Health service needs in empty nest households that considered one member’s needs as household needs (n = 46) included the H1 (56.5%), H4 (65.2%), H5 (63.0%), and H7 (45.7%), and the member would be the householder of the family (90.5%) or had a disease within two weeks (100.0%). In conclusion, family members’ roles and health status play an important role in health service needs in empty nest households. Additionally, physical examination and health education services are the two health services that are most needed by empty nest households, and are suitable for delivering within a household unit.

Identification of time-varying transformation models with fixed effects, with an application to unobserved heterogeneity in resource shares

We provide new results showing identification of a large class of fixed-T panel models, where the response variable is an unknown, weakly monotone, time-varying transformation of a latent linear index of fixed effects, regressors, and an error term drawn from an unknown stationary distribution. Our results identify the transformation, the coefficient on regressors, and features of the distribution of the fixed effects. We then develop a full-commitment intertemporal collective household model, where the implied quantity demand equations are time-varying functions of a linear index. The fixed effects in this index equal logged resource shares, defined as the fractions of household expenditure enjoyed by each household member. Using Bangladeshi data, we show that women’s resource shares decline with household budgets and that half of the variation in women’s resource shares is due to unobserved household-level heterogeneity.

Home Location Choices and the Gender Commute Gap

Using administrative records of home mortgages in Beijing, we show that dual-income households systematically choose to buy homes that are closer to the wife’s workplace. The wife’s commute from the newly purchased home is on average 11% shorter by distance than the husband’s. We estimate a discrete home location choice model and find that households derive substantially larger disutility from the wife’s commute than from the husband’s. Through the lens of a simple collective household model, we show evidence that the gender commute gap reflects the intra-household division of labor and relative bargaining power.

Dowries, resource allocation, and poverty

We study the relationship between dowries – wealth transfers from the bride’s family to the groom or his family at the time of marriage – and individual-level poverty in rural India. Based on the estimates of a collective household model, we show that the share of household consumption expenditure allocated to a woman is strongly associated with the dowry she paid at the time of her marriage. We compute poverty rates separately for women and men and find that women’s poverty relative to men decreases with dowry. Moreover, women who paid dowries are less likely to be poor relative to women who did not, even when their households’ consumption expenditures are the same. Our counterfactual policy analysis indicates that abolishing or reducing dowries (through anti-dowry laws or taxes, for example) may have the unintended effect of aggravating intra-household inequality and increasing women’s risk of living in poverty after marriage.

Identification of semiparametric model coefficients, with an application to collective households

We prove identification of coefficients for a set of semiparametric specifications that are related to multiple index models. Potential applications of these results include models of observed heterogeneity in production functions and in consumer demand systems. We then generalize these results to identify a class of collective household consumption models. We extend the existing literature by proving point identification, rather than the weaker generic identification, of all the features of the collective household model, including price effects. We estimate the model using Japanese consumption data, and find substantial variation in resource shares and indifference scales across households of different sizes.

Sharing the pie: An analysis of undernutrition and individual consumption in Bangladesh

Anti-poverty policies often aim to reach poor individuals by targeting poor households. However, intra-household inequality may mean some poor individuals reside in non-poor households. Using Bangladeshi data, we first show that undernourished individuals are spread across the household per-capita expenditure distribution. We then quantify the extent of total consumption inequality within families. We apply a novel approach to identify individual-level consumption within a collective household model and use the structural estimates to compute poverty rates separately for women, men, boys, girls, and the elderly. We find that women (especially older women) and children (later-born children in particular) face significant probabilities of living in poverty even in households with per-capita expenditure above the poverty line. This poverty misclassification is severe, as one third of poor individuals in our sample live in non-poor families.

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 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.

Household consumption allocation and the collective household model: Children share of household resources in The Gambia

This paper applies the collective household model to allocate household resources among household members. With a Collective Quadratic Almost Ideal Demand System (CQUAIDS) estimated by a Feasible Generalized Nonlinear Least Squares (FGNLS) method, it studies the household demand for six categories of household goods using household income and expenditure survey data from The Gambia, directed to studying the allocation of resources among young and adult members of households in The Gambia. It establishes the sharing rule for children and adult members of the household and shows the effect of demographic, distributive factor, price and income elasticities on the shares of household resources. The results establish that a higher share of resources goes for children while the sharing rule varies for different household types. Also, the findings show significant effects of demographic, distributive factor, price and income on the allocation of the household resources of consumption goods by the household.

For Worse? Financial Hardships and Intra-Household Resource Allocation among Australian Couples

This paper considers the association between intra-household resource allocation and couple financial hardships in Australia. It develops and estimates a collective household model of expenditures on individual-specific necessities and hardship reporting where each partner has a distinct utility function and household decisions are assumed to be Pareto efficient. Using data from the 16th wave of the Household, Income, and Labour Dynamics in Australia Survey with unique questions on individual financial hardships, this paper addresses disadvantage brought about by financial hardships that may be shaped in part by the distributions of preferences and bargaining power within households. Wives report more hardships than husbands. Estimates indicate that wives have weaker preferences than husbands for expenditures on necessary goods for themselves, but there is no evidence of differences in bargaining power. Estimates further indicate that hardships increase with the number of children and each spouse’s disability status and decrease with their ages and subjective financial capabilities.

The More the Poorer? Resource Sharing and Scale Economies in Large Families

The structure of a family may have important consequences for the material well-being of its members. For example, in large families, an individual must share resources with many others, but she may benefit from economies of scale in consumption. In this paper, we study individual consumption in different types of households, with a focus on family structures that are common in developing countries. Based on a collective household model, we develop a new methodology to identify the intra-household allocation of resources and the extent of consumption sharing. We apply our methodology using data from Bangladesh and Mexico, and use the model estimates to compute poverty rates for men, women, and children. Contrary to existing poverty calculations that ignore either intra-household inequality or economies of scale in consumption, ours take into account both dimensions.

Home Location Choices and the Gender Commute Gap

Using administrative records of home mortgages in Beijing, we show that dual-income households systematically choose to buy homes that are closer to the wife’s workplace. The wife’s commute from the newly purchased home is on average 11% shorter by distance than the husband’s. We estimate a discrete home location choice model and find that households derive substantially larger disutility from the wife’s commute than from the husband’s. Through the lens of a simple collective household model, we show evidence that the gender commute gap reflects the intra-household division of labor and relative bargaining power.

Intertemporal Collective Household Models: Identification in Short Panels with Unobserved Heterogeneity in Resource Shares

We provide a new full-commitment intertemporal collective household model to estimate resource shares, defined as the fraction of household expenditure enjoyed by household members. Our model implies nonlinear time-varying household quantity demand functions that depend on fixed effects. We provide new econometric results showing identification of a large class of models that includes our household model. We cover fixed-T panel models where the response variable is an unknown monotonic function of a linear latent variable with fixed effects, regressors, and a nonparametric error term. The function may be weakly monotonic and time-varying, and the fixed effects are unrestricted. We identify the structural parameters and features of the distribution of fixed effects. In our household model, these correspond to features of the distribution of resource shares. Using Bangladeshi data, we show: women’s resource shares decline with household budgets; and, half the variation in women’s resource shares is due to unobserved heterogeneity.

For Worse? Financial Hardships and Intra-Household Resource Allocation Among Australian Couples

This paper considers the association between intra-household resource allocation and couple financial hardships in Australia. It develops and estimates a collective household model of expenditures on individual-specific necessities and hardship reporting where each partner has a distinct utility function and household decisions are assumed to be Pareto efficient. Using data from the 16th wave of the Household, Income, and Labour Dynamics in Australia Survey with unique questions on individual financial hardships, this paper addresses disadvantage brought about by financial hardships that may be shaped in part by the distributions of preferences and bargaining power within households. Wives report more hardships than husbands. Estimates indicate that wives have weaker preferences than husbands for expenditures on necessary goods for themselves, but there is no evidence of differences in bargaining power. Estimates further indicate that hardships increase with the number of children and each spouse's disability status and decrease with their ages and subjective financial capabilities.

SNAP and Food Consumption among the Elderly: A Collective Household Approach with Homescan Data

How should we evaluate transfer programs when the targeted households are composed of individuals with heterogeneous preferences, asymmetric bargaining power, and disparate incentives to share public goods? This paper estimates a collective household model for evaluating the Supplemental Nutrition Assistance Program (SNAP) among older households. I use longitudinal Homescan data to identify SNAP-eligible food. I find that husbands have relatively stronger preferences for food than wives, and that household demand is affected by bargaining power (i.e., control over resources) within households. Failure to account for this difference in preferences and control leads to underestimates of elderly couples' total food demand, and of their implied response (at both intensive and extensive margins) to a counterfactual experiment of replacing SNAP with a cash transfer program. I find that for most eligible older households, their SNAP-eligible spending given the cash transfer is above the program's needs standard. Their spending patterns suggest that low income is the main reason for food insecurity, not that they have different preferences from richer households. Overall these findings imply that grocery vouchers or cash transfers would be more cost-effective than in-kind transfers among older households.

Home Production of Childcare and Labour Supply Decisions in a Collective Household Model

This paper proposes a dynamic structural model of labour market and childcare choices for couples within a collective model of decision making. We formalise explicitly the need for childcare as a function of the age structure of the children population in the household then examine the determinants of the decision to supply labour. The fraction of home-produced childcare to household childcare needs is considered to be a public good within the household, for which preferences are heterogeneous across households. An important feature of our framework, which introduces one of the dynamic dimensions of the decision, is that we take into account the implications of today's labour supply decision on future wage growth and future bargaining power. The decision to leave (partially or not) the labour market is often taken within a couple but, in the event of divorce, the impact of this decision may not be borne by both parties equally, which may render the initial decision inefficient. Using data from the BHPS, we then present a structural estimation of our model to quantify these various components of the choice of home childcare vs. labour supply. We are able to quantify each household's sensitivity to potential childcare policies and find that a large part of the dispersion in these responses comes from households' valuation of home-produced childcare.