Household Consumption When the Marriage Is Stable

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

No 8070, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We develop a novel framework to analyze the structural implications of the marriage market for household consumption patterns. We start by defining a revealed preference characterization of efficient household consumption when the marriage is stable. In particular, stability means that the marriage matching is individually rational and has no blocking pairs. We show that this revealed preference characterization generates testable conditions even if there is only a single consumption observation per household and individual preferences are heterogeneous across households. In addition, the characterization allows for identifying the intrahousehold decision structure (including the sharing rule) under the same minimalistic assumptions. An application to Dutch household data demonstrates the empirical usefulness of our theoretical results.

Keywords: testable implications; Pareto efficient household consumption; stable matching; marriage market; sharing rule identification; preference heterogeneity (search for similar items in EconPapers)
JEL-codes: C14 C78 D11 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2014-03
New Economics Papers: this item is included in nep-ger and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published - published in: American Economic Review, 2017, 107 (6), 1507 - 1534

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https://docs.iza.org/dp8070.pdf (application/pdf)

Related works:
Journal Article: Household Consumption When the Marriage Is Stable (2017)
Working Paper: Household Consumption When the Marriage is Stable (2017)
Working Paper: Household Consumption When the Marriage is Stable (2014)
Working Paper: Household consumption when the marriage is stable (2014)
Working Paper: Household consumption when marriage is stable (2014)
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