Confronting the Robinson Crusoe paradigm with household-size heterogeneity

Christos Koulovatianos, Carsten Schröder and Ulrich Schmidt

No 2008/24, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: Modern macroeconomics empirically addresses economy-wide incentives behind economic actions by using insights from the way a single representative household would behave. This analytical approach requires that incentives of the poor and the rich are strictly aligned. In empirical analysis a challenging complication is that consumer and income data are typically available at the household level, and individuals living in multimember households have the potential to share goods within the household. The analytical approach of modern macroeconomics would require that intra-household sharing is also strictly aligned across the rich and the poor. Here we have designed a survey method that allows the testing of this stringent property of intra-household sharing and find that it holds: once expenditures for basic needs are subtracted from disposable household income, household-size economies implied by the remainder household incomes are the same for the rich and the poor.

Keywords: Linear Aggregation; Representative Consumer; Equivalence Scales; Survey Method; Household-Size Economies (search for similar items in EconPapers)
JEL-codes: C42 D11 D12 D31 D91 E01 E21 I32 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/25559/1/577763547.PDF (application/pdf)

Related works:
Working Paper: Confronting the Robinson Crusoe paradigm with household-size heterogeneity (2008)
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:zbw:cfswop:200824

Access Statistics for this paper

More papers in CFS Working Paper Series from Center for Financial Studies (CFS) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().