rational household labor supply traditionally household behavior is derived from the maximization of a unique utility function in this paper we propose an alternative approach in which the household is modeled as a two member collectivity taking pareto efficient decisions the consequences of this assumption are analyzed in a three good model in which only total consumption and each member s labor supply are observable if the agents are assumed egoistic i e they are only concerned with their own leisure and consumption it is possible to derive falsifiable conditions upon household labor supplies from both a parametric and nonparametric viewpoint if alternatively agents are altruistic restrictions obtain in the nonparametric context useful interpretation stems from the comparison with the characterization of aggregate demand for a private good economy

an experiment on risky choice amongst households a host of experiments have examined theories of risky choice using individuals however many important economic decisions are taken within multi adult households this paper reports on the first economic experiment designed to test theories of household choice we use established couples and face them individually and jointly with decisions involving monetary payoffs we find that joint choices typically are more risk averse than those made by individuals meanwhile choices made by couples exhibit the same kinds of departures from expected utility theory e g the common ratio and common consequence effects as are regularly recorded with individuals

risk preferences are not time preferences on the elicitation of time preference under conditions of risk comment andreoni and sprenger 2012a b report evidence that distinct utility functions govern choices under certainty and risk i investigate the robustness of this result to the experimental design i find that the effect disappears completely when a multiple price list instrument is used instead of a convex time budget design alternatively the effect is reduced by half when sooner and later payment risks are realized using a single lottery instead of two independent lotteries the result is thus at least partially driven by intertemporal diversification supporting an explanation in terms of concavity of the intertemporal and not only atemporal utility function jel c91 d81 d91

opening the black box of intra household decision making theory and non parametric empirical tests of general collective consumption models we provide revealed preference tests of general collective consumption models that account for public consumption and externalities within the household we further propose a novel approach to model special cases of this model which imply alternative assumptions regarding the sharing rule our application uses the panel data from the russia longitudinal monitoring survey we find that the general model together with a large class of special cases cannot be rejected by contrast we do reject the standard unitary model since our tests are entirely nonparametric this provides strong evidence in favor of models focusing on intrahousehold decision making

discounting and altruism to future decision makers is discounting of future decision makers consumption utilities consistent with pure altruism toward those decision makers that is a concern that they are better off according to their own likewise forward looking preferences it turns out that the answer is positive for many but not all discount functions used in the economics literature in particular hyperbolic discounting of the form used by phelps and pollak rev econ studies 35 1968 201 and laibson quart j econ 112 1997 443 is consistent with exponential altruism towards future generations more generally we establish a one to one relationship between discount functions and altruism weight systems and provide sufficient as well as necessary conditions for discount functions to be consistent with pure altruism

estimating consumption economies of scale adult equivalence scales and household bargaining power how much income would a woman living alone require to attain the same standard of living that she would have if she were married what percentage of a married couple s expenditures are controlled by the husband how much money does a couple save on consumption goods by living together versus living apart we propose and estimate a collective model of household behaviour that permits identification and estimation of concepts such as these we model households in terms of the utility functions of its members a bargaining or social welfare function and a consumption technology function we demonstrate generic non parametric identification of the model and hence of a version of adult equivalence scales that we call indifference scales as well as consumption economies of scale the household s resource sharing rule or members bargaining power and other related concepts copyright 2013 oxford university press

urban regeneration and the development industry healey p 1991 urban regeneration and the development industry reg studies 25 97 108 this paper examines a key assumption of urban policy in britain in the 1980s this assumption is that urba

dynasties and destiny on the roles of altruism and impatience in the evolution of consumption and bequests abstract we study the joint role of altruism and impatience and the impact of evolution in the formation of long term time preferences and in the determination of optimal consumption and optimal bequests we show how the consumption paths of dynasties relate to altruism and to impatience and we reason that long lived dynasties will be characterized by a higher degree of altruism and a lower degree of impatience than short lived dynasties

household decision making in rural china using experiments to estimate the influences of spouses abstract many economic decisions are made jointly within households running an experiment on intertemporal choice we investigate the relative influence of spouses on joint household decisions we let each spouse first decide individually and then jointly with the other spouse we propose the use of a random parameter probit model to measure the relative influence of spouses on joint decisions we find that joint choices are in between husbands and wives choices with respect to impatience indicating that both spouses have an influence on joint decisions however we estimate that in 99 of households husbands have a stronger influence than wives

static and intertemporal household decisions we discuss the most popular static and dynamic models of household behavior our main objective is to explain which aspects of household decisions different models can account for using this insight we describe testable implications identification results and estimation findings obtained in the literature particular attention is given to the ability of different models to answer various types of policy questions

taxation and the household abstract previous analyses of demand systems and the welfare effects of taxing male and female labour supplies suppress the analysis of household resource allocation by assuming a household utility function to analyse the implications of assuming this is not the case we construct a simple but fairly general model of household resource allocation and use the properties of the equilibrium of this model to characterise the effects of tax policy on individual utilities as determined by the household resource allocation process

intra household experiments a survey experiments with family groups are rare but since many decisions are taken at the household level or occur within the household it is an important area to investigate this paper provides a survey of the recent experimental work on intra household decision making i discuss some of the challenges involved in doing experiments with couples and families and consider major areas that remain yet to be explored while general themes from the research are still emerging four results repeatedly occur 1 the absence of efficiency in intra household decisions 2 joint decisions that are not a convex combination of individual decisions 3 individual behaviour is affected by opportunities for hiding actions from spouses and 4 deviations from standard models of microeconomics in line with those seen in the anomalies literature of individual decision making

collective labor supply and welfare the paper develops a general collective model of household labor supply in which agents are characterized by their own possibly altruistic preferences and household decisions are only assumed to be pareto efficient an alternative interpretation is that there are two stages in the internal decision process agents first share nonlabor income according to some given sharing rule then each one optimally chooses his or her own labor supply and consumption this setting is shown to generate testable restrictions on labor supplies moreover the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule up to a constant finally the traditional tools of welfare analysis can be adapted to the new setting

the collective model of household consumption a nonparametric characterization we provide a nonparametric characterization of a general collective model for household consumption which includes externalities and public consumption next we establish testable necessary and sufficient conditions for data consistency with collective rationality that only include observed price and quantity information these conditions have a similar structure as the generalized axiom of revealed preference for the unitary model which is convenient from a testing point of view in addition we derive the minimum number of goods and observations that enable the rejection of collectively rational household behavior

efficient intra household allocations a general characterization and empirical tests the neoclassical theory of demand applies to individuals yet in empirical work it is usually taken as valid for households with many members this paper explores what the theory of individuals implies for households that have more than one member we make minimal assumptions about how the individual members of the household resolve conflicts all we assume is that however decisions are made outcomes are efficient we refer to this as the collective setting we show that in the collective setting household demands must satisfy a symmetry and rank condition on the slutsky matrix we also present some further results on the effects on demands of variables that do not modify preferences but that do affect how decisions are made we apply our theory to a series of surveys of household expenditures from canada the tests of the usual symmetry conditions are rejected for two person households but not for one person households we also show that income pooling is rejected for two person households we then test for our collective setting conditions on the couples data none of the collective setting restrictions are rejected we conclude that the collective setting is a plausible and tractable next step to take in the analysis of household behavior

intra household resource allocation an inferential approach if household income is pooled and then allocated to maximize welfare then income under the control of mothers and fathers should have the same impact on demand with survey data on family health and nutrition in brazil the equality of parental income effects is rejected unearned income in the hands of a mother has a bigger effect on her family s health than income under the control of a father for child survival probabilities the effect is almost twenty times bigger the common preference or neoclassical model of the household is rejected if unearned income is measured with error and income is pooled then the ratio of maternal to paternal income effects should be the same equality of the ratios cannot be rejected there is also evidence for gender preference mothers prefer to devote resources to improving the nutritional status of their daughters fathers to sons

testing the neoclassical model of family labor supply and fertility the mcelroy horney nash bargaining model of family demand behavior relaxes the restriction that nonearned income of husband and wife has the identical effect on family labor supply and commodity demands this restriction of the neoclassical model offamily behavior is tested for the determination of husband and wife labor supply andfertility based on the 1981 socioeconomic survey of thailand the neoclassical restriction is rejected for female labor supply andfertility another unexplored limitation offamily demand studies due to the sample self selection of intact marriages is empirically treated through alternative estimation strategies in this case a more sharply focused theory of marital behavior is needed to identify family demand models

an alternative approach to the analysis of wage differentials a key question in many studies of male female or black white wage differentials is how much of the differential can be explained by economic factors and how much remains unexplained the unexplained portion is then ascribed to discrimination since oaxaca 17 first formalized this decomposition the residual difference methodology has been the dominant methodology utilized in empirical studies of wage differentials 4 7 8 10 15 18 but recently the validity of the assumptions underlying the residual difference methodology have been called into question by butler 5 6 in this paper the theoretical underpinnings of the residual difference methodology are reexamined and an alternative theoretical framework for this methodology is suggested the new framework overcomes the shortcomings inherent in oaxaca s specification of the model and therefore provides a sound theoretical foundation for the residual difference decomposition

what s mine is yours the influence of male and female incomes on patterns of household expenditure this paper uses microdata from the 1992 statistics canada family expenditure survey to provide evidence that male and female incomes do not always exert identical influences on household expenditures the novelty of the paper lies in its demonstration that while incomes may be pooled for some categories of consumption e g housing the income pooling hypothesis must be rejected for others we also go beyond simply rejecting the pooling hypothesis to ask how male versus female income is used our results stress the on going importance of traditional gender roles for example we find that expenditures on child care increase only with women s incomes higher male income is not associated with higher expenditure on child care even when both spouses are full time full year paid workers

estimating individual discount rates in denmark a field experiment we estimate individual discount rates with respect to time streams of money using controlled laboratory experiments these discount rates are elicited by means of field experiments involving real monetary rewards the experiments were carried out across denmark using a representative sample of 268 people between 19 and 75 years of age individual discount rates are estimated for various households differentiated by socio demographic characteristics such as income and age our conclusions are that discount rates are constant over the 12 month to 3 year horizons used in these experiments and that discount rates vary substantially with respect to several socio demographic variables hence we conclude that it would be reasonable to assume constant discount rates for specific household types but not the same rates across all households

estimating time preferences from convex budgets experimentally elicited discount rates are frequently higher than what seems reasonable for economic decision making such high rates are often attributed to present biased discounting a well known bias of standard measurements is the assumption of linear consumption utility attempting to correct this bias using measures of risk aversion to identify concavity researchers find reasonable discounting but at the cost of exceptionally high utility function curvature we present a new methodology for identifying time preferences both discounting and curvature from simple allocation decisions we find reasonable levels of both discounting and curvature and surprisingly dynamically consistent time preferences jel c91 d12 d81 understanding and estimating time preferences is obviously of great importance to economists marketers and policy makers consumers decide how much to invest in savings education real estate and life insurance how much to diet exercise and smoke whether to marry when to have children and what to leave in their wills while there has been substantial research estimating time preferences using aggregate consumption data 1 the bulk of the effort has occurred in laboratory environments 2 among the many laboratory techniques employed recent studies have favored multiple price lists mpl with monetary payments 3 with mpls individuals are asked multiple times to choose between smaller payment amounts closer to the present and larger amounts further into the future the interest rate increases monotonically in a price list such that the point where an individual switches from preferring sooner payments to later payments carries interval

consume now or later time inconsistency collective choice and revealed preference this paper develops a revealed preference methodology for exploring whether time inconsistencies in household choice are the product of nonstationarities at the individual level or the result of individual heterogeneity and renegotiation within the collective unit an empirical application to household level microdata highlights that an explicit recognition of the collective nature of choice allows the vast majority of household behaviour to be rationalised by theory that assumes preference stationarity at the individual level for our particular short panel data set simply permitting limited intrahousehold heterogeneity in time preferences allows the choices of 98 4 of the sample to be rationalised by a model that assumes exponential discounting at the individual level we also find that couples characterized by lower divergence in spousal discount rates are older more likely to have children and wealthier which we take as indications of experiencing higher match quality

income and outcomes a structural model of intrahousehold allocation there is evidence from several sources that one cannot treat many person households as a single decision maker if this is the case then factors such as the relative incomes of the household members may affect the final allocation decisions made by the household we develop a method of identifying how incomes affect outcomes given conventional family expenditure data the basic assumption we make is that household decision processes lead to efficient outcomes we apply our method to a sample of canadian couples with no children we find that the final allocations of expenditures on each partner depend significantly on their relative incomes and ages and on the level of lifetime wealth

the less you discount the more it shows you really care interpersonal discounting in households abstract household members make monetary tradeoffs across time classical economics treats these decisions as if one rational individual makes them this assumption masks important other regarding concerns between spouses we designed an artefactual field experiment and collected data from 94 pairs of cohabiting couples to capture the complex nature of intra household time preferences estimation results show that 1 the interpersonal discount rate the rate used to tradeoff intertemporal payoffs between one s own payoff and the spouse s payoff is significantly different from the individual discount rate and 2 the interpersonal discount rate may provide an alternative way for people to express their other regarding preferences towards their spouses

discounting for personal and social payments patience for others impatience for ourselves the market rate of return on private investment is often used as the discount rate when conducting cost benefit analysis cba of public projects i argue that the decision to invest pits current consumption against future consumption both of which accumulate to the private decision maker public projects on the other hand provide benefits that accrue to society in general to examine the appropriateness of discount rates based on returns to private investment this paper considers lab experiments designed to test whether individuals discount personal and social benefits at different rates personal benefits are captured through personal monetary payments while social benefits are captured through anonymous donations to charitable organizations i jointly elicit time and risk preferences and find that subjects discount charitable contributions at significantly lower rates than personal payments