Individual welfare analysis for collective households

A-Tier
Journal: Journal of Public Economics
Year: 2018
Volume: 166
Issue: C
Pages: 98-114

Authors (5)

Cherchye, Laurens (not in RePEc) Cosaert, Sam (not in RePEc) De Rock, Bram (not in RePEc) Kerstens, Pieter Jan (KU Leuven) Vermeulen, Frederic (KU Leuven)

Score contribution per author:

0.804 = (α=2.01 / 5 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We propose novel tools for the analysis of individual welfare on the basis of aggregate household demand behavior. The method assumes a collective model of household consumption with the public and private nature of goods specified by the empirical analyst. A main distinguishing feature of our approach is that it builds on a revealed preference characterization of the collective model that is intrinsically nonparametric. We show how to identify individual money metric welfare indices from observed household demand, along with the intrahousehold sharing rule and the individuals' willingness-to-pay for public consumption (i.e. Lindahl prices). The method is easy to use in practice and yields informative empirical results, which we demonstrate through both a simulation exercise and an empirical application to labor supply data drawn from the Panel Study of Income Dynamics.

Technical Details

RePEc Handle
repec:eee:pubeco:v:166:y:2018:i:c:p:98-114
Journal Field
Public
Author Count
5
Added to Database
2026-01-25