The Intrahousehold Allocation of Private and Public Consumption: Theory and Evidence from U.S. Data

Olivier Donni

No 2137, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We adopt the collective approach to consumer behavior with egoistic agents, and assume that the household consumption is either private or public. We then show that (i) household demands have to satisfy testable constraints and (ii) some elements of the decision process can be retrieved from observed behavior. These results are based on a conditional demand (‘m-demand’) framework in which household demands are directly derived from the marginal rates of substitution. Finally, we present an empirical application using the U.S. Consumer Expenditure Survey. Overall, the data turn out to be consistent with the theoretical model.

Keywords: private good; demand analysis; intra-household distribution; collective decision; public good; Lindahl price (search for similar items in EconPapers)
JEL-codes: D11 D12 H41 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2006-05
New Economics Papers: this item is included in nep-cdm and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published - published as "A Simple Approach to Investigate Intrahousehold Allocation of Private and Public Goods" in: Review of Economics and Statistics, 2009, 91 (3), 617-628

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