Unitary or collective household decisions? A non-parametric test using detailed data on household expenditures and time use

We present an empirical comparison of the unitary and collective model of household behaviour. Our analysis uses non-parametric revealed preference tools and abstains from imposing functional form assumptions on the individual utilities and the household decision process. We here advance the first non-parametric evaluation of a general collective model that includes household choices on both private and public consumption, labour supply and domestic work. We assessed model performance in terms of goodness-of-fit and integrated these results into a complementary power analysis. The models were applied to cross-sectional micro-data from the Belgian MEqIn survey. We present a thorough assessment of our homogeneous preferences assumption and document the effects of variation in both observable and unobservable characteristics to explain sample preference heterogeneity. Our findings reject the preference aggregation assumptions that underlie the unitary model and instead suggest the collective model as a promising alternative to describe multiperson household allocations of time and money.status: publishe