Lecture notes
ECON0115 Weeks 6-7
- Module
- Economics (ECON0115)
- Institution
- University College London (UCL)
In depth notes on ECON0115 Weeks 6-7
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Weeks 6 and 7Non-Unitary models
Gains from marriage
• From an economic standpoint marriage is a partnership for the purpose of joint production and
consumption
• This partnership yields gains of a twofold nature: economic gains and emotional gains
• Economic gains arise from
◦ Sharing of public goods
◦ Specialisation within the household
◦ Within household credit
‣ Under imperfect credit markers, households can undertake some e cient investment
that singles can’t
◦ Risk sharing
◦ Children
Public goods
Assumptions:
• Price of both goods normalised to 1
• Each partner only cares about their own utility
• Utility is increasing in both private and public goods for both agents
• Preferences are monotonic
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