Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83781
Authors: 
Salcedo, Alejandrina
Schoellman, Todd
Tertilt, Michèle
Year of Publication: 
2010
Series/Report no.: 
Working Papers, Banco de México 2010-07
Abstract: 
The size of the average American household has fallen dramatically - from six in 1850 to three in 2000. To explain this decline we model households as collections of roommates who share the costs of household public goods. If private goods are more income elastic than public goods, as we document in the paper, an increase in income endogenously leads to smaller households. We calibrate the model to match data from 2000. Changing incomes to their 1850 levels, we find that our mechanism can explain 37 percent of the observed reduction in the number of adults per household and 16 percent of the reduction in the number of children.
Subjects: 
household size
living arrangements
roommates
economies of scale
household public goods
fertility decline
JEL: 
D10
E10
J11
N30
O10
Document Type: 
Working Paper
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