Enlarging the collective model of household behaviour: a revealed preference analysis
Working paper
Issue number:
2017/17
Series:
CORE Discussion Papers
Publisher:
Center for Operations Research and Econometrics
Year:
2017
We use a comprehensive model of strategic household behaviour in
which the spouses' expenditure on each public good is decomposed into
autonomous spending and coordinated spending à la Lindahl. We obtain
a continuum of semi-cooperative regimes parameterized by the relative
weights put on autonomous spending, by each spouse and for each public
good, nesting full cooperative and non-cooperative regimes as limit cases.
Testing is approached through revealed preference analysis, by looking for
rationalisability of observed data sets, with the price of each public good
lying between the maximum and the sum of the hypothesized marginal
willingnesses to pay of the two spouses. Once rationalised, an observed
data set always allows to identify the sharing rule, except when both
spouses contribute in full autonomy to some public good (a situation of
local income pooling).