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Collective household welfare and intra-household inequality

Jean-Paul Chavas (), Martina Menon (), Elisa Pagani () and Federico Perali ()
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Elisa Pagani: Department of Economics, University of Verona

Theoretical Economics, 2018, vol. 13, issue 2

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.

Keywords: Collective household model; sharing rule; household welfare; intra-household inequality; theil index (search for similar items in EconPapers)
JEL-codes: D11 D12 D13 (search for similar items in EconPapers)
Date: 2018-05-29
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Related works:
Working Paper: Collective Household Welfare and Intra-household Inequality (2017) Downloads
Working Paper: Collective Household Welfare and Intra-household Inequality (2015) Downloads
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