Contents
16.1. Introduction 1370
16.1.1 InequalityBetweenIndividuals 1370
16.1.2 Modeling Household Decision Making: The Collective Model 1374
16.2. The Collective Model: Concepts, Definitions, and Axioms 1375
16.3.
Modeling Household Behavior: The Collective Model 137816.3.1 Private Goods Only: The Sharing Rule 1378
16.3.2 PublicandPrivateCommodities 1379
16.3.3 An Example 1382
16.3.4 Domestic Production 1384
16.4. TheDeterminantsofIntrahouseholdAllocation 1386
16.4.1 Bargaining Models 1387
16.4.2 Equilibrium Models 1388
16.5. Identification 1390
16.5.1 “Pure” IdentificationintheCollectiveModel 1391
16.5.1.1 MainIdentificationResult 1391
16.5.1.2 PrivateGoodsandtheSharingRule 1393
16.5.1.3 Public Goods Only 1395
16.5.1.4 TheGeneralCase 1396
16.5.1.5 A Linear Expenditure System Example 1396
16.5.2 Comparing Different Family Sizes 1400
16.5.3 Identifying from Market Equilibrium 1402
16.6. Empirical Findings 1403
16.6.1 “Pure” IdentificationoftheSharingRule 1404
16.6.2 Intrahousehold Inequality Over Time and the Sharing Rule: Lise and Seitz (2011) 1409
16.6.3 Intrahousehold Inequality and Children 1410
16.6.4 Revealed Preference Restrictions and the Identification of the Sharing Rule 1413
16.7. Conclusion 1415
Acknowledgments 1416
References 1416
Abstract
Studies of inequality often ignore resource allocation within the household. In doing so they miss an important element of the distribution of welfare that can vary dramatically depending on overall environmental and economic factors. Thus, measures of inequality that ignore intrahousehold allocations are both incomplete and misleading. We discuss determinants of intrahousehold allocation of
Handbook of Income Distribution, Volume 2B
© 2015 Elsevier B.V.
All rights reserved. 1369
ISSN 1574-0056, http://dx.doi.org/10.1016/B978-0-444-59429-7.00017-0 resources and welfare. We show how the sharing rule, which characterizes the within-household allocations, can be identified from data on household consumption and labor supply. We also argue that a measure based on estimates of the sharing rule is inadequate as an approach that seeks to understand how welfare is distributed in the population because it ignores public goods and the allocation of time to market work, leisure, and household production. We discuss a money metric alternative, that fully characterizes the utility level reached by the agent. We then review the current literature on the estimation of the sharing rule based on a number of approaches, including the use of distribution factors as well as preference restrictions.
Keywords
Collective model, Income distribution, Economics of the family, Labor supply, Household behavior
JEL Classification Codes
D1, D11, D12, D13, D31, D6, H41
16.1.