Household consumption when the marriage is stable

L. Cherchye, Thomas Demuynck, B. de Rock, F. Vermeulen

    Research output: Contribution to journalArticleAcademicpeer-review

    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.

    Original languageEnglish
    Pages (from-to)1507-1534
    Number of pages28
    JournalAmerican Economic Review
    Volume107
    Issue number6
    DOIs
    Publication statusPublished - Jun 2017

    Keywords

    • EFFICIENT INTRAHOUSEHOLD ALLOCATIONS
    • REVEALED PREFERENCE THEORY
    • GENERAL CHARACTERIZATION
    • NONPARAMETRIC BOUNDS
    • COLLECTIVE MODEL
    • EMPIRICAL TESTS
    • GROUP-BEHAVIOR
    • IDENTIFICATION
    • DEMAND
    • MARKET

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