ECON0115 Topics in Household Economics Summary UCL

WEEK I


lincomepooling
Redistributionof hasnoimpactonobservedchoice

if x 1 or 99 c isthesame

yegg y 1

underincomepooling yes
a nothingto dowithjointbankaccounts
4 mechanismfeasibility
f observedchoice

importantbecause




No Peoplecan'tsay
jointbankaccounts Enficebserved
observe'd
choice
theycan rued
jointbankaccounts

tudyingobservedchoice
Notmechanism 1
andnotallocation
usingtheoryofchoice t dateonchoicetoevaluateincomepooling



A inincomeallocation




t incomepooling reallocating E ofincomemaynotleadtothesamechoice unless
samepreferences nomothetic
preferences
notincomepooling



bythequantity andsums
withincomepooling choicesareonlyaffected ofincomenottheallocation

, Unitaryhouseholdmodel

Budgetconstraint




pg t p292 E Y
slope Palp

withatwopersonhousehold

y yo t w h t waha
budgetset
nineteen
B
i pg t p292 E yo t win t wahr

Reallocating E ofincome

Pig t p292 E yo t Iwin El t wah t El
Yo
pg t p292 E t win t wah
unchanged

no a choice imposesincome
pooling

choice
MRS MRT




havingdiffincomes
notchangingobservedchoices

income
pooling t
separateseffectof y 42

p
margeffectofincomesarenotequal




othersutilityisindependentofincome
caringabout pooling

, IData1




Testingincome
pooling
estimateobservedchoicesagainstincome

ifmargeffectofincomesareequal

,