Pierre André Chiappori (Columbia) "Family Economics" - Cemmap

5. Empirical issues for the collective model 229
assumption of a different sort. The most convincing evidence of inefficient
outcomes is Udry (1996). This is a different style of test than SNR1 and
the relevance of distribution factors. Udry uses information on household
production.
To sum up: there is considerable evidence against the unitary model
and some evidence in favor of the collective model. 14 What is singularly
lacking in the literature are tests for the collective model against other
non-unitary models for high income countries. This is part reflects the lack
of non-collective models that can be taken to the data.
5.5.3 Estimating the collective model
Many of the works mentioned above go beyond testing the collective model;
insofar as the predictions are not rejected, they often propose an estimation
of the structural components of the model. Although this field is still largely
in construction, we may briefly summarize some findings obtained so far.
Demand studies
Some of the works mentioned above go beyond testing the collective model;
when the predictions are not rejected, they often propose estimation of the
structural components of the model. Although this field is still largely in
construction, we may briefly summarize some findings obtained so far.
Many of the papers listed in Table 5.2 use demand data alone to test for
the collective model. Only three of them go beyond testing and impose the
collective model restrictions and then estimate the sharing rule and how it
depends on distribution factors. The first paper to do this was Browning
et al (1994). These authors use Canadian Family Expenditure Survey data
on men and women’s clothing to test for the collective model restrictions
and to identify the determinants of the sharing rule. Although they have
price data they absorb prices into year/region dummies and treat the data
as cross-sectional. Thus the ‘no price variation’ analysis of section 5.2 is
appropriate. They only consider singles and married couples who are in
fulltime employment. The distribution factors they find significant are the
difference in ages and the relative earnings of the two partners; they also
allow that total expenditure on nondurables and services enters the sharing
rule. They address directly the problem that variations in relative earnings
may be spuriously correlated with spending on clothing (higher paid jobs
might require relatively more expensive clothing) by testing whether singles
14 A notable exception to the latter are the results for efficient risk sharing in low income
countries; see, for example, Dercon and Krishnan (2000), Dubois and Ligon (2005),
Duflo and Udry (2003), Goldstein (2002), Ligon (2002). These tests, however, are based
on specific models that crucially involve specific asusmptions regarding commitment;
their discussion is therefore postponed until chapter 6 which deals with dynamic issues.