UCL Discovery
UCL home » Library Services » Electronic resources » UCL Discovery

Consumption inequality and intrahousehold allocations

Lise, JS; Seitz, S; (2007) Consumption inequality and intrahousehold allocations. Green open access

[img]
Preview
PDF
12731.pdf

Download (413kB)

Abstract

The current literature on consumption inequality treats all adults within the household equally, making the implicit assumption that all consumption inequality is between, not within, households. However, increased marital sorting on earnings and the subsequent rise in the share of women's income in the household may have important implications for consumption inequality measured at the individual level. We use an extension of the collective framework of Chiappori to estimate a rule for assigning resources to individual household members. We then construct a measure of individual level inequality by looking at implied changes in intra-household allocations and explore the implications of our framework for the measurement of individual level, versus household level, consumption inequality. Our analysis, which is based on households comprising one or two adults, suggests that the conventional approach of ignoring intra-household allocations underestimates the level of cross-sectional consumption inequality by 30% and overstates the trend by two-thirds. Our findings also indicate that increases in marital sorting on wages and hours worked can simultaneously explain virtually all of the decline in within household inequality and a substantial fraction of the rise in between household inequality in the UK since the 1970s.

Type: Article
Title: Consumption inequality and intrahousehold allocations
Open access status: An open access version is available from UCL Discovery
Keywords: Collective Model, Consumption Inequality, Marital Sorting
UCL classification: UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/12731
Downloads since deposit
580Downloads
Download activity - last month
Download activity - last 12 months
Downloads by country - last 12 months

Archive Staff Only

View Item View Item