Arbeitspapier
An Afriat theorem for the collective model of household consumption
We provide a nonparametric 'revealed preference' characterization of rational household behavior in terms of the collective consumption model, while accounting for general (possibly non-convex) individual preferences. We establish a Collective Axiom of Revealed Preference (CARP), which provides a necessary and sufficient condition for data consistency with collective rationality. Our main result takes the form of a 'collective' version of the Afriat Theorem for rational behavior in terms of the unitary model. This theorem has some interesting implications. With only a finite set of observations, the nature of consumption externalities (positive or negative) in the intra-household allocation process is non-testable. The same non-testability conclusion holds for privateness (with or without externalities) or publicness of consumption. By contrast, concavity of individual utility functions (representing convex preferences) turns out to be testable. In addition, monotonicity is testable for the model that assumes all household consumption is public.
- Language
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Englisch
- Bibliographic citation
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Series: IZA Discussion Papers ; No. 3794
- Classification
-
Wirtschaft
Consumer Economics: Theory
- Subject
-
Collective model
consumption
Pareto efficiency
revealed preferences
Afriat theorem
Collective Axiom of Revealed Preferences
Konsumentenverhalten
Privater Haushalt
Haushaltsökonomik
Pareto-Optimum
Offenbarte Präferenzen
Theorie
- Event
-
Geistige Schöpfung
- (who)
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Cherchye, Laurens
De Rock, Bram
Vermeulen, Frederic
- Event
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Veröffentlichung
- (who)
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Institute for the Study of Labor (IZA)
- (where)
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Bonn
- (when)
-
2008
- Handle
- URN
-
urn:nbn:de:101:1-20081126681
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Cherchye, Laurens
- De Rock, Bram
- Vermeulen, Frederic
- Institute for the Study of Labor (IZA)
Time of origin
- 2008
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An Empirical Model of Collective Household Labour Supply with Nonparticipation
Empirical Estimation Results of a Collective Household Time Allocation Model
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Opening the black box of intra-household decision-making: theory and non-parametric empirical tests of general collective consumption models
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