The Intrafamily Allocation of Goods--How to Separate the Adult from the Child

Reuben Gronau

Journal of Labor Economics, 1991, vol. 9, issue 3, 207-35

Abstract: Separability between parents' and children's consumption is a necessary assumption in any attempt to impute the intrafamily allocation of goods. This assumption implies an estimation procedure where the observed effect of demographic variables on the marginal propensity to consume adult goods is used as a key for identifying the rule governing the distribution between children's and parent's consumption. Using the U.S. 1972 Consumption Expenditure Survey, the author finds that white and black families tend to allocate three-quarters of their consumption to parents and one-quarter to children. Tests for robustness, for selectivity bias, and of the separability assumption itself uphold these findings. Copyright 1991 by University of Chicago Press.

Date: 1991
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