Essays on Household Economics

Abstract

The dissertation consists of three essays on different aspects of the collective household models in the household economics literature. The first essay estimates a collective household model for evaluating the Supplemental Nutrition Assistance Program (SNAP) among older households. I use longitudinal Homescan data to identify SNAP-eligible food. I find that husbands have relatively stronger preferences for food than wives, and that household demand is affected by bargaining power (i.e., control over resources) within households. Failure to account for this difference in preferences and control leads to underestimates of older couples' total food demand, and of their implied response (at both intensive and extensive margins) to a counterfactual experiment of replacing SNAP with a cash transfer program. I find that most eligible older households spend more on SNAP-eligible food than would be allowed by their SNAP benefits. Their spending patterns suggest that their poor diet is mainly due to low income rather than tastes. Overall these findings imply that a SNAP comparable cash transfer can be an effective tool to achieve the goals of the SNAP program. The second essay is joint work with my advisor Arthur Lewbel. We first prove identification of coefficients in a class of semiparametric models. We then apply these results to identify collective household consumption models. We extend the existing literature by proving point identification, rather than the weaker generic identification, of all the features of a collective household (including price effects). Moreover, we do so in a model where goods can be partly shared, and allowing children to have their own preferences, without observing child specific goods. We estimate the model using Japanese consumption data, where we find new results regarding the sharing and division of goods among husbands, wives, and children. The third essay is a joint paper with Tomoki Fujii. We study the intra-household inequality in resource allocation and bargaining within Japanese couples without children. We exploit a unique Japanese dataset in which individual private expenditures, savings, and time use information are available. From the data, we find that on average, the husband enjoys 1.5 times more purely private expenditures than the wife. However, the data only provides resource allocation on purely private expenditures, while 68 percent of household expenditures are devoted to the family, i.e., joint expenditures. We refer to the collective household literature in order to recover the unobserved sharing of total household expenditures, including both private and public goods. We find that the model-predicted sharing pattern is moderately consistent with the individual expenditure data. However, the intra-household inequality would be underestimated if we only use the sharing in purely private expenditures from the data. We find that Japanese wives are relatively disadvantaged to their husbands, no matter in purely private expenditures, total household expenditures, or gains from marriage. The findings in this paper provides certain external validity in terms of the collective household model of consumption, which we argue should be widely adopted in analyzing individual welfare in multi-person households.