Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jan, 1988, Volume 56, Issue 1

Rational Household Labor Supply<63:RHLS>2.0.CO;2-2
p. 63-90

Pierre-Andre Chiappori

Traditionally, household behavior is derived from the maximization of a unique utility function. In this paper, we propose an alternative approach, in which the household is modeled as a two-member collectivity taking Pareto-efficient decisions. The consequences of this assumption are analyzed in a three-good model, in which only total consumption and each member's labor supply are observable. If the agents are assumed egoistic (i.e., they are only concerned with their own leisure and consumption), it is possible to derive falsifiable conditions upon household labor supplies from both a parametric and nonparametric viewpoint. If, alternatively, agents are altruistic, restrictions obtain in the nonparametric context; useful interpretation stems from the comparison with the characterization of aggregate demand for a private-good economy.

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