The Engel Curves of Non-Cooperative Households

Pierre-Andre Chiappori and Jesse Naidoo

The Economic Journal, 2020, vol. 130, issue 627, 653-674

Abstract: We provide a set of necessary and sufficient conditions for a system of Engel curves to have been generated by a non-cooperative model of family behaviour. These conditions fully characterise the local behaviour of household-level consumption in the cross-section, i.e., as a function of total income and distribution factors. In this setting, any demand system compatible with a non-cooperative model is also compatible with a collective model, but the converse is not true. We describe how these nested conditions may be tested using standard instrumental-variables strategies.

Date: 2020
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