Caring and Sharing: Tests between Alternative Models of Intra-Household Allocation

Oxford Economics Discussion Paper Series No. 70

41 Pages Posted: 16 Jan 2002

See all articles by Martin Browning

Martin Browning

University of Copenhagen - Department of Economics

Valérie Lechene

University College London

Multiple version iconThere are 2 versions of this paper

Date Written: April 2001

Abstract

Several models of intra-household decision making have been suggested in the literature. One important dichotomy is between non-cooperative and cooperative models (including specific models of bargaining). The other important distinction is between models that allow for caring and those that do not. We present a framework that includes all suggested models and variants as special cases. We derive the theoretical predictions of these models for the relationship between expenditures on goods and the intra-household distribution of income. We estimate and test between these relationships using Canadian household expenditure data. We conclude that there is evidence that both husbands and wives care for each other in the sense that with an unequal distribution of incomes the high income partner behaves as a 'Becker dictator' and there is local income pooling. We further find that for about half of the households in our sample (those with more equal incomes) a re-distribution of income would lead to changes in budget allocations. We conclude that the data are consistent with a collective model with caring partners.

Keywords: Intra-household allocation, altruism, cooperative behavior, non-cooperative behavior

JEL Classification: D11, D12

Suggested Citation

Browning, Martin and Lechene, Valérie, Caring and Sharing: Tests between Alternative Models of Intra-Household Allocation (April 2001). Oxford Economics Discussion Paper Series No. 70, Available at SSRN: https://ssrn.com/abstract=296921 or http://dx.doi.org/10.2139/ssrn.296921

Martin Browning

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark
(45) 35-32-30-70 (Phone)
(45) 35-32-30-64 (Fax)

Valérie Lechene (Contact Author)

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom