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Intertemporal collective consumption decisions: a revealed preference analysis

Citation

Cherchye, Laurens; De Rock, Bram; Sabbe, Jeroen; & Verriest, Ewout (2010). Intertemporal collective consumption decisions: a revealed preference analysis.

Abstract

We provide a revealed preference methodology for analyzing intertemporal household consumption behavior in terms of the collective model. Following Mazzocco (2007), we focus on the full commitment model and the no commitment model. We develop revealed preference conditions that allow for testing data consistency with these intertemporal consumption models in a nonparametric manner, i.e. while avoiding imposing (typically nonveriÖable parametric/functional structure for the household decision process. In turn, this implies an operational test for commitment, which can be interesting from a policy point of view. An empirical application illustrates our methodology. In this application we also discuss an intermediate 'limited' commitment model that is situated between the full commitment and no commitment models.

URL

http://www.eea-esem.com/files/papers/EEA/2010/646/DynamicCollective_EEA_2010_draft12022010.pdf

Reference Type

Conference Paper

Year Published

2010

Author(s)

Cherchye, Laurens
De Rock, Bram
Sabbe, Jeroen
Verriest, Ewout