Stable marriage, household consumption and unobserved match quality

Martin Browning, Laurens Cherchye, Thomas Demuynck, Bram De Rock and Frederic Vermeulen

No 679647, Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: We present a methodology for the structural empirical analysis of household consumption and time use behaviour under marital stability. Our approach is of the revealed preference type and non-parametric, meaning that it does not require a prior functional specification of individual utilities. Without making use of the transferable utility assumption, but still allowing for monetary transfers, our method can identify individuals' unobserved match qualities and quantify them in money metric terms. We can include both preference factors, affecting individuals' preferences over private and public goods, and match quality factors, driving differences in unobserved match quality. We demonstrate the practical usefulness of our methodology through an application to the Belgian MEqIn data. Our results reveal intuitive patterns of unobserved match quality that allow us to rationalize both the observed matches and the within-household allocations of time and money.

Keywords: household consumption; marital stability; unobserved match quality; revealed preference analysis; intrahousehold allocation (search for similar items in EconPapers)
Pages: 46
Date: 2021-08-24
New Economics Papers: this item is included in nep-isf and nep-upt
Note: paper number DPS 21.10
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Published in FEB Research Report Department of Economics

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https://lirias.kuleuven.be/retrieve/629735 (application/pdf)

Related works:
Working Paper: Stable marriage, household consumption and unobserved match quality (2021)
Working Paper: Stable Marriage, Household Consumption and Unobserved Match Quality (2021)
Working Paper: Stable marriage, household consumption and unobserved match quality (2021)
Working Paper: Stable Marriage, Household Consumption and Unobserved Match Quality (2021)
Working Paper: Stable marriage, household consumption and unobserved match quality (2021)
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