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We propose a collective labor supply model with household production that generalizes a model of Blundell, Chiappori and Meghir (2005). Adults’preferences not only depend on own leisure and individual private consumption of market goods. They also depend on the consumption of domestic goods, which are produced by combining market goods with individuals’time. A new identification result, which uses production shifters, is developed. We apply our model to unique data on Dutch couples with children. Our application uses a novel estimation strategy that builds upon the familiar two-stage allocation representation of the collective model.

We propose a collective labor supply model with household production that generalizes an original model of Blundell, Chiappori and Meghir (2005). In our model, adults' individual preferences do not only depend on own leisure and individual private consumption of market goods. They also depend on the consumption of domestic goods, which are produced by combining goods bought at the market with individuals'time. We apply our model to new and unique data on Dutch couples with children. The data contains detailed information about the spouses' time use and the intrahousehold allocation of all expenditures. Our application uses a novel estimation strategy that builds upon the familiar two-stage allocation representation of the collective model. We obtain interesting (and plausible) empirical results. Spouses' preferences depend on the consumption of domestically produced goods (including children's welfare). Next, Pareto weights depend on variables like the individual wages and the share in the household's nonlabor income. Finally, and perhaps surprisingly, we do not …nd evidence that mothers care more for their children than fathers. JEL Classi…cation: D11, D12, D13.

We develop a new Data Envelopment Analysis (DEA)-based methodology for measuring the efficiency of Decision Making Units (DMUs) characterized by multiple inputs and multiple outputs. The distinguishing feature of our method is that it explicitly includes information about output-specific inputs and joint inputs in the efficiency evaluation. This contributes to opening the "black box" of efficiency measurement in two different ways. First, including information on the input allocation substantially increases the discriminatory power of the efficiency measurement. Second, it allows us to decompose the efficiency value of a DMU into output-specific efficiency values which facilitates the identification of the outputs the manager should focus on to remedy the observed inefficiency. We demonstrate the usefulness and managerial implications of our methodology by means of a unique data set collected from the Activity Based Costing (ABC) system of a large service company with 290 DMUs.

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. (c) 2009 by The University of Chicago. All rights reserved..