Household Consumption When the Marriage Is Stable
Laurens Cherchye, Thomas Demuynck, Bram De Rock, Frederic Vermeulen
American Economic Review · 2017 · Volume 107 · Issue 6
Abstract
We develop a novel framework to analyze the structural implications of the marriage market for household consumption. We define a revealed preference characterization of efficient household consumption when the marriage is stable. We characterize stable marriage with intrahousehold (consumption) transfers but without assuming transferable utility. Our revealed preference characterization generates testable conditions even with a single observation per household and heterogeneous individual preferences across households. The characterization also allows for identifying the intrahousehold decision structure (including the sharing rule) under the same minimalistic assumptions. An application to Dutch household data illustrates the usefulness of our theoretical results.
Keywords
Welfare Economics: General, Equity, Justice, Inequality, and Other Normative Criteria and Measurement, Taxation and Subsidies: Efficiency, Optimal Taxation, Taxation and Subsidies: Externalities, Redistributive Effects, Environmental Taxes and Subsidies, Welfare, Well-Being, and Poverty: Government Programs, Provision and Effects of Welfare Programs
Enable JavaScript for citation tools and additional paper interactions.