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Mery Ferrando, UCLouvain Print
Friday, 02 February 2018, 12:15 - 13:15

Mery Ferrando, UCLouvain

Intra-household Allocations with Public Goods: A New Source of Gender Inequality.

Abstract : Collective models of household behavior usually estimate economies of scale using a technology with same individual shadow prices for shared consumption across members. In this paper, we allow individual marginal willingness to pay for joint consumption to differ, by treating it as a public good. These differences in willingness to pay are in turn allowed to enter the evaluation of individual income. We provide a flexible parametric estimation of a model with both private and public goods, which is estimated on a new dataset of Belgian households with detailed information on individual private and public consumption. Results show that this alternative modeling approach significantly affects individual income. Given the significant lower marginal willingness to pay for the public good among women, their income is significantly lower than in the standard approach. This translates into a higher level of poverty, especially among women, and higher inequality relative to a model with equal shadow prices.

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