Do smokers behave differently? A tale of zero expenditures and separability concepts

A simple test is derived for a necessary condition for zero expenditures on tobacco to arise from corner solutions. This test coincides with a test for a new separability concept, which is closely related to demographic separability.

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 many person households consist of several members which may have different preferences. Among these household members, an intrahousehold bargaining process is assumed to take place. Next 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.collective household models, household bargaining, intrahousehold allocation, consumption behaviour, labour supply.

A collective model for female labour supply with nonparticipation and taxation

In this paper, a collective discrete choice model is presented for female labour supply. Both preferences of females and the intrahousehold decision process are econometrically identifiable. The model incorporates nonparticipation and nonlinear taxation. It is applied to Belgian microdata and is used to evaluate the 2001 Tax Reform Act. We find moderate negative behavioural responses to the reform. The tax reform further implies a Pareto improvement for most of the households in the sample.collective household models; intrahousehold allocation; labour supply; tax reform; identification

And the winner is... An empirical evaluation of two competing approaches to household labour supply

In this paper, an empirical evaluation is presented of two competing flexible labour supply models. The first is a standard unitary model, while the second is based on the collective approach to household behaviour. The evaluation focuses on the testing of the models' theoretical implications, on their ability to identify structural information, like preferences and on their empirical performance. Models are estimated on Belgian microdata from 1992 and 1997. The unitary model cannot be rejected for single person households, while it is rejected for a sample of two person households. The alternative collective model cannot be rejected for the same sample. However, since the crucial assumption of egoistic or Beckerian caring individual preferences is rejected, the comparative advantage of the collective model as basis for intrahousehold welfare evaluations cannot be fully exploited. Finally, the collective model has the best empirical fit.collective household models; household bargaining; intrahousehold allocation; labour supply

Evaluation of the empirical performance of two-stage budgeting AIDS, QUAIDS and Rotterdam models based on weak separability

Microsimulation models for indirect taxation require detailed underlying demand systems, in order to be policy relevant. A possible solution for the econometric problem (lack of necessary degrees of freedom) is the separability concept and the closely related notion of two-stage budgeting. In this paper, weak separability is applied on the Almost Ideal Demand System (AIDS), its quadratic extension QUAIDS and the Rotterdam model. These two-stage budgeting demand systems were estimated on Belgian time series data and were evaluated by means of a comparison of their elasticities (both partial and total), goodness-of-fit measures and their forecasting accuracy. Though the rank three QUAIDS model does not dominate the others in every respect (at least for time series data), it has nice theoretical properties which can on their own be a justification for the use of the system.

Robust rankings of multi-dimensional performances: An application to Tour de France racing cyclists

There is a general interest in ranking performances (e.g., in sports or policy), which essentially implies aggregating several performance dimensions. The usual approach considers a 'cardinal' linear weighting of the different single-dimensional performance indicators. We present an alternative approach, which merely requires 'ordinal' information regarding the importance of the different performance dimensions. We argue that this approach is robust with respect to alternative specifications of the (possibly non-linear) underlying performance aggregation function. An application to Tour de France racing cyclists (in the period 1953-2004) illustrates the approach. We find that Eddy Merckx, Bernard Hinault and Lance Armstrong (robustly) dominate almost all other racing cyclists in our sample, while they do not dominate each other. A net-dominance metric ranks Bernard Hinault on the first place in our sample; Eddy Merckx and Lance Armstrong follow very closely ex-aequo on the second place.

Nonparametric analysis of household labour supply: Goodness-of-fit and power of the unitary and the collective model.

Goodness of fit; Power; Model;

Nonparametric Analysis of Household Labour Supply: Goodness-of-Fit and Power of the Unitary and the Collective Model

We compare the empirical performance of the unitary and the collective approach to modelling observed labour supply behaviour. Deviating from the mainstream literature, we conduct a nonparametric analysis, which avoids the distortive impact of an erroneously specified functional form for the preferences and/or the intrahousehold bargaining process. Our analysis specifically focuses on the goodness-of-fit of the two behavioural models. To guarantee a fair comparison, we complement this goodness-of-fit analysis with a power analysis. Our results strongly favour the collective approach to modelling the behaviour of multi-person households. More generally, they illustrate the usefulness of nonparametric testing tools for the empirical evaluation of theoretical behavioural models.

Nonparametric analysis of household labour supply: Goodness-of-fit and power of the unitary and the collective model.

We compare the empirical performance of the unitary and the collective approach to modelling observed labour supply behaviour. Deviating from the mainstream literature, we conduct a nonparametric analysis, which avoids the distortive impact of an erroneously specified functional form for the preferences and/or the intrahousehold bargaining process. Our analysis specifically focuses on the goodness-of-fit of the two behavioural models. To guarantee a fair comparison, we complement this goodness-of-fit analysis with a power analysis. Our results strongly favour the collective approach to modelling the behaviour of multi-person households. More generally, they illustrate the usefulness of nonparametric testing tools for the empirical evaluation of theoretical behavioural models.Goodness of fit; Model; Power;

Homeownership and the life cycle: An ordered logit approach.

This paper presents an ordered logit approach to model the optimal timing of buying a house in the life cycle. The model is applied to three recent Belgian household budget surveys. We find that households postpone homeownership or choose to be lifelong tenant due to an increase of the transaction tax rate, the real interest rate on mortgages and an indicator for the evolution of real house prices. Expenditures on nondurables, on the contrary, have a positive impact on (early) homeownership.Logit; Homeownership; Life cycle; Transaction tax;