Household Consumption When the Marriage Is Stable
AbstractWe develop a novel framework to analyze the structural implications of the marriage market for household consumption. We define a revealed preference characterization of efficient household consumption when the marriage is stable. We characterize stable marriage with intrahousehold (consumption) transfers but without assuming transferable utility. Our revealed preference characterization generates testable conditions even with a single observation per household and heterogeneous individual preferences across households. The characterization also allows for identifying the intrahousehold decision structure (including the sharing rule) under the same minimalistic assumptions. An application to Dutch household data illustrates the usefulness of our theoretical results.
CitationCherchye, Laurens, Thomas Demuynck, Bram De Rock, and Frederic Vermeulen. 2017. "Household Consumption When the Marriage Is Stable." American Economic Review, 107 (6): 1507-34. DOI: 10.1257/aer.20151413
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