A Collective Model of Household Behavior with Private and Public Goods: Theory and Some Evidence from U.S. Data

In the present paper, we adopt the collective approach to consumer behavior-which supposes that each household member is characterized by his/her own preferences and that the decision process results in Pareto-efficient outcomes-and assume, in addition, that agents are egoistic and consumption is either private or public. The main results are based on a conditional demand ('m-demand') framework in which household demands are directly derived from the marginal rates of substitution. We show that (i) household demands have to satisfy testable constraints and (ii) some elements of the decision process can be retrieved from observed behavior. These theoretical considerations are followed by an empirical application using the U.S. Consumer Expenditure Survey. Overall, it turns out that the data are consistent with the theoretical model.Collective Decision, Intra-household Distribution, Demand Analysis, Private Goods, Public Good, Lindahl Price, GMM

Collective Household Labor Supply: Nonparticipation and Income Taxation

In this paper, we adopt the usual assumptions of the collective approach, i.e. individualism and efficiency, to study household labor supply. The theoretical innovation is twofold. First, we incorporate the decision to participate in the labor market in the initial setting. Second, we abandon the assumption of linearity of the budget constraint. We show that (i) structural elements such as preferences or the outcome of the decision process can be recovered, and (ii) testable restrictions are generated from the observation of the household labor supplies. We also examine, for this model, how to simulate the incidence of fiscal reforms. Dans cet article, nous adoptons les hypothèses habituelles de l'approche collective, à savoir, l'individualisme et l'efficacité, pour étudier l'offre de travail du ménage. L'innovation théorique est double. D'une part, nous incorporons dans le cadre initial la décision de participer au marché du travail. D'autre part, nous abandonnons l'hypothèse de linéarité de la contrainte budgetaire. Nous montrons alors que (i) des éléments structurels du processus de décision peuvent être retrouvés, et (ii) des restrictions testables sont générées de l'observation des offres de travail du ménage. Nous examinons également, pour ce modèle, comment faire des simulations de réformes fiscales.Collective Models, Labor Supply, Income Tax, Corner Solutions

Collective Female Labor Supply: Theory and Application

In this paper, we deal with female labour supply in the collective framework (Chiappori, Journal of Political Economy (1992)). We study married couples and start from the empirical observation that the husband's labour supply is generally determined by exogenous constraints. We then show that, in this case, structural elements of the decision process, such as individual preferences or the rule that determines the intra-household distribution of welfare, can be identified if household demand for at least one commodity, together with the wife's labour supply, is observed. These theoretical considerations are followed by an empirical application using French data. Dans cet article, nous traitons la question de l'offre féminine de travail dans le cadre de l'approche collective (Chiappori, Journal of Political Economy (1992)). Nous étudions des couples mariés et partons de l'observation empirique que l'offre de travail du mari est généralement déterminée par des contraintes exogènes. Nous montrons alors que, dans ce cas, des éléments structurels du processus de décision, tels que les préférences individuelles or la règle qui détermine la répartition intra-familiale du bien-être peut-être identifiée à condition que la demande pour au moins un bien est observée conjointement avec l'offre de travail. Ces considérations théoriques sont suivies par une application empirique utilisant des données françaises.Collective Decisions, Female labour Supply, Commodity Demands, Intra-household Distribution

A Collective Model of Household Behavior with Private and Public Goods: Theory and Evidence from US Data

In this paper, we adopt the collective approach to consumer behavior --- which supposes that each household member is characterized by his/her own preferences and the decision process results in Pareto-efficient outcomes --- and assume, in addition, that agents are egoistic and consumption is either private or public. The main results are based on a conditional demand (`m-demand') framework where household demands are directly derived from the marginal rates of substitution. We show that (i) household demands have to satisfy testable constraints and (ii) some elements of the decision process can be retrieved from observed behavior. These theoretical considerations are followed by an empirical application using the U.S. Consumer Expenditure Survey. It turns out that the data are overall consistent with the theoretical modelHousehold behavior, collective models, public goods

Labor Supply, Home Production and Welfare Comparisons

We consider the collective model of labor supply with marketable domestic production (Chiappori, 1997). We first show that, if domestic production is mistakenly ignored by the economist, welfare analyses will be probably distorted. Precisely, the identification of "collective" indirect utilities will be generally biased. The direction and the size of the bias depend on the complementarity/substituability of spouses' time inputs in the production process. The identification is unbiased if and only if the production function is additive. We then show that, even if domestic labor supplies are not observed by the economist, (i) market labor supplies have to satisfy testable restrictions, (ii) the structure of the model is partially identifiable so that valid welfare comparisons are still possible. Our identification results generalize Chiappori's (1992) ones.Household, Collective Model, Labor Supply, Home Production, Welfare Analysis, Identification

A Simple Model of Collective Consumption

In this paper, we present a collective model of household demand based on Pareto-efficiency. In addition, we suppose that (i) each household member is egoistic and consumption is purely private, (ii) there is a set of distribution factors and (iii) there is one exclusive good. Then we derive the testable restrictions which are implied by this theoretical setting.Collective Models, Household Demands, Distribution Factors, Slutsky Matrix

A Theory of Child Targeting

There is a large empirical literature on policy measures targeted at children but surprisingly very little theoretical foundation to ground the debate on the optimality of the different instruments. In the present paper, we examine the merit of targeting children through two general policies, namely selective commodity taxation and cash transfer to family with children. We consider a household that comprises an adult and a child. The household behavior is described by the maximization of the adult’s utility function, which depends on the child’s welfare, subject to a budget constraint. The relative effects of a price subsidy and of a cash benefit on child welfare are then derived. In particular, it is shown that ‘favorable’ distortions from the price subsidies may allow to redistribute toward the child. The framework is extended to account for possible paternalistic preferences of the State. Finally, it is shown that, in contrast to the traditional view, well-chosen subsidies can be more cost effective than cash transfers in alleviating child poverty.commodity taxation, child benefit, targeting, intrahousehold distribution, social welfare, paternalism, labeling

The Measurement of Child Costs: A Rothbarth-Type Method Consistent with Scale Economies and Parents? Bargaining

We propose a new methodology to estimate the share of household income accruing to children, i.e., the cost of children. The household behavior is represented according to the collective approach. That is, each household member is characterized by speci.c preferences. Following the principle of the Rothbarth approach, the identi.cation of the children.s share requires the observation of adult-speci.c goods. Our method di¤ers from this traditional approach in that it is compatible with economies of scale as well as with parents. bargaining. In addition, it allows de.ning a new concept of child costs that takes into account economies of scale. We illustrate the method with an application on the French Household Budget Survey.Consumer Demand; Collective Model; Rothbarth Method; Cost of Children; Scale Economies; Equivalence Scales; Indifference Scales

On the identification of Frisch Labor supplies

This paper examines how Frisch labor supplies, and other structural components of the intertemporal model of labor supply, can be recovered from estimates obtained with the approach developed by Heckman and MaCurdy.Labor Supply, Frisch, Life Cycle, Identification

A Theory of Child Targeting

There is a large empirical literature on policy measures targeted at children but surprisingly very little theoretical foundation to ground the debate on the optimality of the different instruments. In the present paper, we examine the merit of targeting children through two general policies, namely selective commodity taxation and cash transfer to family with children. We consider a household that comprises an adult and a child. The household behavior is described by the maximization of the adult’s utility function, which depends on the child’s welfare, subject to a budget constraint. The relative effects of a price subsidy and of a cash benefit on child welfare are then derived. In particular, it is shown that ‘favorable’ distortions from the price subsidies may allow to redistribute toward the child. The framework is extended to account for possible paternalistic preferences of the State. Finally, it is shown that, in contrast to the traditional view, well-chosen subsidies can be more cost effective than cash transfers in alleviating child poverty.commodity taxation, child benefit, targeting, intrahousehold distribution, social welfare, paternalism, labeling