Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/43117
Authors: 
Koulovatianos, Christos
Schröder, Carsten
Schmidt, Ulrich
Year of Publication: 
2010
Series/Report no.: 
Kiel Working Paper 1663
Abstract: 
Much analysis in macroeconomics empirically addresses economy-wide incentives behind consumer/investment choices by using insights from the way a single representative household would behave. Heterogeneity at the micro level can jeopardize attempts to back up the representative consumer construct with microfoundations. One complex aspect of micro-level heterogeneity is household size, as individuals living in multi-member households have the potential to share goods within the household, benefiting from household-size economies. Theoretically, we show that validating the role of a representative consumer would require that the way individuals benefit from intra-household sharing is strictly aligned across the rich and the poor: once expenditures for subsistence needs are subtracted from disposable household income, household-size economies the remainder (discretionary) household incomes entail must be the same across the rich and the poor. We have designed a survey method that allows the testing of this stringent property of intra-household sharing and find that it holds.
Subjects: 
Linear Aggregation
Equivalent Expenditures
Survey Method
Household-Size Economies
JEL: 
C42
E21
D12
E01
D11
D91
D31
I32
Document Type: 
Working Paper

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