Collective household welfare and intra-household inequality

Abstract

We investigate the relationship between the individual and household indirect utility functions in the context of a collective household model. Our analysis produces new results that explain how the rule governing the distribution of resources among household members is related to the measurement of household welfare and intra-household inequality. We show that in a collective model of private consumption, income shares are equal to the product of two weights: the Pareto weight and a distribution weight reflecting income effects across individuals. For a weighted Bergsonian representation of household utility and general assumptions about individual preferences, we derive the associated household welfare functions and intra-household inequality measures belonging to a family of entropy indexes. We illustrate our findings with an empirical application that estimates a collective demand system to recover associated individual and household welfare functions along with the measures of intra-household inequality. This is the first application that estimates the Pareto weight and examines its role within a measure of income dispersion among household members.We are grateful to Rolf Aaberge, Ugo Colombino, Stefan Hoderlein, Eleonora Matteazzi, Lars Nesheim, various seminar and conference participants, the editor, and three anonymous reviewers for helpful comments and suggestions. We also thank Nicola Tommasi for excellent research assistance. All errors and omissions are the sole responsibility of the authors.

A Collective Household Labour Supply Model with Disability: Evidence from Iraq

“…In other words, these variables influence the family behaviour only through the effect on the intra-household decision process, but do not enter into the household's budget constraint or the individual preferences. In our case, the working supply functions may depend on such distribution factors and therefore a shift on them will have consequences for the intra-household decisions and the individuals within the household (Chavas et al 2018;Chiappori et al 2002;Chiappori and Ekeland 2009). Also, household composition, region, and marital status are important facto of time preferences to labour supply and leisure (Hiatt and Godwin 1990;Hilton 1990).…”

“…2005Blundell at al. , 2007Bourguignon et al 1993;Chavas et al 2018;Chiappori 1988Chiappori , 1992Chiappori et al 2002;Fortin and Lacroix 1997;Giovanis and Ozdamar 2018;Lundberg et al 1997).…”

Modelos colectivos de consumo y distribución intra-hogar

“…El gasto de consumo individual no observable del k-ésimo miembro es φ k (p, y, s), que constituye la regla de reparto que gobierna la asignación de los in-gresos familiares entre los miembros, con k=1 φ k (p, y, s) = y. Chavas et al (2018) muestran que φ k (p, y, s) = yµ k (p, y, s) en el caso de log-homotética como Cobb-Douglas o PIGLOG. Este resultado es útil para el análisis que continúa en las próximas secciones.…”

“…Esta especificación agregada del sistema de demanda es estimable y ha sido implementada en Arias et al (2004), Chavas et al (2018), Menon et al (2018), Mangiavacchi et al (2018), Belete et al (2019) y Belete (2020) incorporando un estrategia de identificación para la regla de reparto. 7…”

“…Además de requerir como fuente de información la observación de al menos un bien asignable, incorporan dos restricciones sobre las preferencias individuales; similitud en las preferencias entre personas dentro del hogar, o similitud en las preferencias entre individuos (adultos o niños) que viven en hogares de distinta composición. Por último, en trabajos más recientes, Chavas et al (2018) y Arias (2020) introducen un modelo, en línea con las contribuciones originales de esta literatura, que requiere como fuente de información la observación de un bien asignable y factores de distribución, sin imponer condiciones sobre las preferencias. 5 A diferencia de la mayoría de los trabajos anteriores que se basan en la estimación de curvas de Engel, este enfoque estima un sistema de demanda completo e introduce precios en el análisis, posibilitando aplicaciones de bienestar completas.…”