Collective Household Model Research Articles

Building the Family Nest: A Collective Household Model with Competing Pre-Marital Investments and Spousal Matching

We develop a model of the household in which spousal incomes are determined by pre-marital investments, the marriage market is characterized by assortative spousal matching, and endogenously-determined sharing rules form the basis of intra-household allocations. By incorporating pre-marital investments and spousal matching into the collective household model, we are able to (a) establish the welfare implications of the collective household model for pre-marital choices and spousal matching and (b) identify the fundamental determinants of endogenously-determined and maritally sustainable intra-marital sharing rules. In particular, we find that all sharing rules along the assortative order support unconditionally efficient outcomes where both pre-marital investment and intra-household allocations are efficient. We also show that, for each couple, the marriage market generates a unique and maritally sustainable sharing rule that is a function of the distribution of the pre-marital endowments and the sex ratios in the marriage market.

The Collective Household Model with Competing Pre-Marital Investments

We develop a model of the household in which spousal incomes are determined by pre-marital investments, the marriage market is characterized by assortative matching, and a sharing rule forms the basis of intra-household allocations. We identify the properties of the sharing rules that are sustainable in this model. We find that the unconditionally efficient outcomes, in which both pre-marital investments and intra-household allocations are efficient, can be supported by sharing rules that are consistent with the collective approach. In particular, when marriage does not generate a surplus, we show that only one sharing rule, which is purely a function of the gender wage gap, is sustainable in the marriage market. This sharing rule is Pareto efficient. When marriage generates a surplus and the numbers and distributions of men and women in the marriage market are identical, we demonstrate that there exists a continuum of maritally sustainable sharing rules. Associated with each of these sharing rules is a continuum of equilibria only one of which is unconditionally efficient. In contrast, when marriage involves a surplus and the numbers and distributions of men and women in the marriage market differ, the sharing rule which supports the unconditionally efficient equilibrium associated with the threat point of the more abundant gender - at least for couples in the lowest assortative order - emerges as the maritally sustainable outcome.

Calculating compensation in cases of wrongful death

Abstract Death statutes in the United States list elements of loss for which a defendant must make compensatory payment. The element that economists as expert witnesses are called upon to calculate is net income, roughly defined as the decedent's income minus personal expenses. The existence of joint or shared consumption goods complicates the definition and calculation of net income. Net income can be interpreted as the money required for survivors to attain the same standard of living as before. Equivalence scales traditionally used for this type of calculation are flawed. A new method for calculating net income is proposed, based on a collective household model.

Collective Household Models: Principles and Main Results

In the traditional approach to consumer behaviour it is assumed that households behave as if they were single decision‐making units. This approach has methodological, empirical and welfare economic deficiencies. A valuable alternative to the traditional model is the collective approach to household behaviour. The collective approach explicitly takes account of the fact that multi‐person households consist of several members which may have different preferences. Among these household members, an intrahousehold bargaining process is assumed to take place. In addition to providing an introduction to the collective approach, this survey intends to show how different collective household models, each with their own aims and assumptions, are connected.

Individual Versus Joint Taxation in Models With Household Production

In a recent paper, Piggott and Whalley (1996) challenge the ‘‘conventional wisdom’’ that says that the individual rather than the household should be the unit of taxation and argue instead for joint taxation. Their point of departure is a point well taken. The literature on which this wisdom is based, in particular Boskin and Sheshinski (1983), ignores the existence of household production. The general argument is a nice one in the theory of the second-best. In the absence of taxation of market wage income, the marginal rates of technical substitution between primary and secondary labor in market and in household production would be equal to each other, and the marginal rate of substitution between the market and household good would be equal to the marginal rate of transformation between them, thus achieving Pareto efficiency. Introduction of income taxation leads to a distortion of the relation between the marginal rate of substitution and the marginal rate of transformation, which is the focus of concern in the literature,2 and, given the differing econo-

Gains féminins, allocation des biens et statut nutritionnel des enfants au Burkina Faso

Women's Income, Good Allocation and Nutritional Status of Children in Burkina Faso The objective of the present study is to provide an econometric test to the relative validity of collective and unitary household behavior models, with the help of data of the 1994-1995 Burkina Faso household survey. Obtained results seem to justify conclusions of noncooperative approach where the well-being of the group is partly function of the identity of the income earner. On the one hand, the estimation of demand functions indicates that the share of wives income influences significantly, positively food expenses and energy, and negatively expenses to cigarettes, tobacco and moving of household. On the other hand, reduced nutrition equations suggest that, all others things being equal, more the share of woman income of household grows, more the probability of malnutrition of children of less of 60 month decreases. But, the coefficients of malnutrition appear statistically different according to the gender, and suggest an differential effect to the advantage of boys inherent to the share of wives income. Considerations of equity, efficiency and the adherence to rules of the game of the traditional society institutions could justify this situation. Results of the present research have economic policy implications, to the extent of the modification of intra-household distribution of income is a means to increase food expenses, to reduce relative expenses to the tobacco and to raise the nutritional status of children.

Modeling Household Behavior in Developing Countries: Discussion

A large and growing body of literature has examined how agricultural households cope with risk. Much of the work has focused on which types of households are better able to smooth consumption, testing whether households with more resources and greater access to income-smoothing institutions, such as credit markets or well-functioning labor markets exhibit greater consumption smoothing. However, income shocks may have different effects upon different individuals within households, and differences in individual ability to smooth income or consumption may have welfare consequences which go beyond foregone income. The development of collective household models challenges the assumption that individuals within households maximize a single utility function. The assumption of income pooling has also been rejected in a growing body of empirical research on intrahousehold resource allocation. However, research on risk-pooling within households and differences in individual abilities to smooth consumption is relatively new. Selected papers are discussed.