Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236437 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14406
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Welfare analyses conducted by policy practitioners around the world usually rely on equivalized or per-capita expenditures and ignore the extent of within-household inequality. Recent advances in the estimation of collective models suggest ways to retrieve the complete sharing process within families using homogeneity assumptions (typically preferences stability upon exclusive goods across individuals or household types) and the observation of exclusive goods. So far, the prediction of these models has not been validated, essentially because intrahousehold allocation is seldom observed. We provide such a validation by leveraging a unique dataset from Bangladesh, which contains information on the fully individualized expenditures of each family member. We also test the core assumption (efficiency) and homogeneity assumptions used for identification. It turns out that the collective model predicts individual resources reasonably well when using clothing, i.e., one of the rare goods commonly assignable to male, female and children in standard expenditure surveys. It also allows identifying poor individuals in non-poor households while the traditional approach understates poverty among the poorest individuals.
Subjects: 
collective model
Engel Curves
Rothbarth Method
sharing rule
JEL: 
D11
D12
D36
I31
J12
Document Type: 
Working Paper

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