European Center for Advanced Research in Economics and Statistics

Title : Intrahousehold Welfare: Theory and Application to Japanese Data

Abstract: In this paper we develop a novel approach tomeasuring individual welfare within households, recognizing that individualsmay have both different preferences (particularly regarding public consumption)and differential access to resources. We construct a money metric measure ofwelfare that accounts for public goods (by using personalized prices) and theallocation of time. We then use our conceptual framework to analyseintrahousehold inequality in Japan, allowing for the presence of two publicgoods: expenditures on children and other public goods including housing. Weshow empirically that women have much stronger preferences for both publicgoods and this has critical implications for the distribution of welfare in thehousehold.