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Inefficient Collective Households: Cooperation and Consumption

Arthur Lewbel () and Krishna Pendakur

No 1000, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: We propose a model of inefficiency in collective households. Inefficiency depends on a "cooperation factor," which can also affect both the allocation of resources within a household and the utility of household members. Households are conditionally efficient, conditioning on the value of the cooperation factor. This lets us exploit convenient modeling features of efficient households (like not needing to specify the bargaining process), while still accounting for, and measuring the dollar cost of, inefficiency. An example of a cooperation factor is domestic violence, which we found, in Bangladeshi data, reduces consumption efficiency by 5%, and shifts 1.5% of household resources towards men.

Keywords: Collective Household Model; Inefficiency; Bargaining Power; Sharing Rule; Demand Systems; Engel Curve (search for similar items in EconPapers)
JEL-codes: D13 D11 D12 C31 I32 (search for similar items in EconPapers)
Date: 2020-02-15
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