Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110727
Authors: 
Dauphin, Anyck
Fortin, Bernard
Lacroix, Guy
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9002
Abstract: 
Collective rationality is seldom if ever rejected in the literature, raising doubt about its falsifiability. We show that the standard approach to test the collective model with distribution factors may yield misleading inference. We generalize the model and provide an appropriate test procedure to assess its validity. Our new approach extends to households that include more than two decision-makers (e.g., polygamous households, adult children). We investigate household consumption decision-making within monogamous and bigamous households in Burkina Faso. Using the standard testing approach, collective rationality within monogamous households is not rejected. Using our proposed test procedure, collective rationality is however rejected for monogamous households. Furthermore, our test also rejects collective rationality for bigamous households. We conclude that the household efficiency does yield empirically falsifiable restrictions despite being scarcely rejected in the literature.
Subjects: 
collective model
distribution factors
rationality
efficiency
polygamy
JEL: 
D1
D7
J12
Document Type: 
Working Paper

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