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Caring and sharing: tests between alternative models of intra-household allocation

Lechene, V.; Browning, M.; (2001) Caring and sharing: tests between alternative models of intra-household allocation. (Department of Economics Discussion Paper Series 70). Department of Economics, University of Oxford: Oxford, UK.

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Abstract

Several models of intra-household decision making have been suggested in the literature. One important dichotomy is between non-cooperative and cooperative models (including specific models of bargaining). The other important distinction is between models that allow for caring and those that do not. We present a framework that includes all suggested models and variants as special cases. We derive the theoretical predictions of these models for the relationship between expenditures on goods and the intra-household distribution of income. We estimate and test between these relationships using Canadian household expenditure data. We conclude that there is evidence that both husbands and wives care for each other in the sense that with an unequal distribution of incomes the high income partner behaves as a `Becker dictator` and there is local income pooling. We further find that for about half of the households in our sample (those with more equal incomes) a re-distribution of income would lead to changes in budget allocations. We conclude that the data are consistent with a collective model with caring partners.

Type: Working / discussion paper
Title: Caring and sharing: tests between alternative models of intra-household allocation
Publisher version: http://www.economics.ox.ac.uk/index.php/papers/det...
Language: English
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of SandHS > Dept of Economics
URI: http://discovery.ucl.ac.uk/id/eprint/16876
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