Confronting the Robinson Crusoe paradigm with household-size heterogeneity

Modern macroeconomics empirically addresses economy-wide incentives behind economic actions by using insights from the way a single representative household would behave. This analytical approach requires that incentives
Modern macroeconomics empirically addresses economy-wide incentives behind economic actions by using insights from the way a single representative household would behave. This analytical approach requires that incentives of the poor and the rich are strictly aligned. In empirical analysis a challenging complication is that consumer and income data are typically available at the household level, and individuals living in multimember households have the potential to share goods within the household. The analytical approach of modern macroeconomics would require that intra-household sharing is also strictly aligned across the rich and the poor. Here we have designed a survey method that allows the testing of this stringent property of intra-household sharing and find that it holds: once expenditures for basic needs are subtracted from disposable household income, household-size economies implied by the remainder household incomes are the same for the rich and the poor. JEL Classification: C42, E21, D12, E01, D11, D91, D31, I32
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Metadaten
Author:Christos Koulovatianos, Carsten Schröder, Ulrich Schmidt
URN:urn:nbn:de:hebis:30-56972
Series (Serial Number):CFS working paper series (2008, 24)
Document Type:Working Paper
Language:English
Date of Publication (online):2008/08/15
Year of first Publication:2008
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2008/08/15
Tag:Equivalence Scales ; Household-Size Economies; Linear Aggregation ; Representative Consumer ; Survey Method
HeBIS PPN:202949710
Institutes:Center for Financial Studies (CFS)
Dewey Decimal Classification:330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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