Individual-Level Inequality

Laurens Cherchye, Bram De Rock and Frederic Vermeulen

No 21945, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Standard household-level data hide substantial heterogeneity in how consumption, money, and time are allocated within households. This motivates the need for measuring welfare at the individual level and a structural approach on how household data can be used to capture these differences. After documenting what can be learned from direct survey evidence, we present the collective approach as an attractive framework for modeling intra-household decision making with preference heterogeneity, public consumption, and home production. We then survey three identification strategies that recover individual preferences and resource shares from widely available datasets: differential, revealed preference, and preference similarity methods. Applying these tools reveals that a sizable share of overall inequality originates within households and that individual poverty rates often diverge sharply from household-level measures. Overall, our review demonstrates that measuring welfare at the individual level fundamentally reshapes our understanding of inequality, and offers practical guidance for incorporating intra household heterogeneity into empirical welfare evaluations.

JEL-codes: D13 D31 I32 J22 (search for similar items in EconPapers)
Date: 2026-09
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP21945 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:21945

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP21945

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().