Welfare analysis of fiscal reforms in Europe: Does the representation of family decision processes matter? Evidence from Italy

Maria Chiuri and Ernesto Longobardi ()

No 7, SERIES from Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro"

Abstract: This paper adopts a "piece-meal" approach to empirically identify, on a sample of Italian households, a collective model where both nonparticipation and non-convex budget sets are allowed for. Two tax reforms, i.e. the 2002 tax changes recently introduced in Italy and a revenue neutral linear income tax are evaluated by the collective framework derived. The predictions obtained for individual labour supplies, income and welfare distribution are then compared with those of a traditional unitary model. The exercise provide an assessment of the distortion introduced in positive and normative analyses when individuals are assumed to behave as if in a unitary, rather than in a collective world. The results suggest that further efforts should be devoted to the analysis of intra-household decision models.

Keywords: collective models; intra household allocation; tax reform (search for similar items in EconPapers)
JEL-codes: D11 D12 J22 (search for similar items in EconPapers)
Pages: 1171
Date: 2002-01, Revised 2002-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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