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The revealed preference approach to collective consumption behaviour: testing and sharing rule recovery

Citation

Cherchye, Laurens; De Rock, Bram; & Vermeulen, Frederic (2011). The revealed preference approach to collective consumption behaviour: testing and sharing rule recovery. The Review of Economic Studies, 78(1), 176-198.

Abstract

We present a revealed preference methodology for empirically analysing collective consumption behaviour. First, we introduce an integer programming (IP) methodology for testing data consistency with collective consumption models that account for publicly as well as privately consumed goods. This IP methodology can include information on “assignable quantities” for private goods. Next, we show that the IP methodology allows for recovering the personalized (Lindahl) prices for the public goods and the personalized quantities for the private goods. In turn, this implies recovery of the sharing rule (i.e. personalized income share levels). An empirical application demonstrates the practical usefulness of the methodology.

URL

http://dx.doi.org/10.1093/restud/rdq018

Reference Type

Journal Article

Year Published

2011

Journal Title

The Review of Economic Studies

Author(s)

Cherchye, Laurens
De Rock, Bram
Vermeulen, Frederic