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Stable marriage, household consumption and unobserved match quality

Author

Listed:
  • Martin Browning
  • Laurens Cherchye
  • Thomas Demuynck
  • Bram De Rock
  • Frederic Vermeulen
Abstract
We present a methodology for the structural empirical analysis of household consumption and time use behaviour under marital stability. Our approach is of the revealed preference type and non-parametric, meaning that it does not require a prior functional specification of individual utilities. Without making use of the transferable utility assumption, but still allowing for monetary transfers, our method can identify individuals' unobserved match qualities and quantify them in money metric terms. We can include both preference factors, affecting individuals' preferences over private and public goods, and match quality factors, driving differences in unobserved match quality. We demonstrate the practical usefulness of our methodology through an application to the Belgian MEqIn data. Our results reveal intuitive patterns of unobserved match quality that allow us to rationalize both the observed matches and the within-household allocations of time and money.

Suggested Citation

  • Martin Browning & Laurens Cherchye & Thomas Demuynck & Bram De Rock & Frederic Vermeulen, 2021. "Stable marriage, household consumption and unobserved match quality," Working Papers of Department of Economics, Leuven 679647, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    • Handle: RePEc:ete:ceswps:679647
    Note: paper number DPS21.10
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    File URL: https://lirias.kuleuven.be/retrieve/629735
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    References listed on IDEAS

    as
    1. Alfred Galichon & Scott Duke Kominers & Simon Weber, 2019. "Costly Concessions: An Empirical Framework for Matching with Imperfectly Transferable Utility," Journal of Political Economy, University of Chicago Press, vol. 127(6), pages 2875-2925.
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    7. Laurens Cherchye & Bram De Rock & Khushboo Surana & Frederic Vermeulen, 2020. "Marital Matching, Economies of Scale, and Intrahousehold Allocations," The Review of Economics and Statistics, MIT Press, vol. 102(4), pages 823-837, October.
    8. Laurens Cherchye & Bram De Rock & Frederic Vermeulen, 2012. "Married with Children: A Collective Labor Supply Model with Detailed Time Use and Intrahousehold Expenditure Information," American Economic Review, American Economic Association, vol. 102(7), pages 3377-3405, December.
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    11. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Frederic Vermeulen, 2017. "Household Consumption When the Marriage Is Stable," American Economic Review, American Economic Association, vol. 107(6), pages 1507-1534, June.
    12. Pierre-André Chiappori & Sonia Oreffice & Climent Quintana-Domeque, 2012. "Fatter Attraction: Anthropometric and Socioeconomic Matching on the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 120(4), pages 659-695.
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    18. Arnaud Dupuy & Alfred Galichon, 2014. "Personality traits and the marriage market," Post-Print hal-03470458, HAL.
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    20. Pierre‐André Chiappori, 2016. "Equivalence versus Indifference Scales," Economic Journal, Royal Economic Society, vol. 0(592), pages 523-545, May.
    21. Cherchye, Laurens & Cosaert, Sam & De Rock, Bram & Kerstens, Pieter Jan & Vermeulen, Frederic, 2018. "Individual welfare analysis for collective households," Journal of Public Economics, Elsevier, vol. 166(C), pages 98-114.
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    Cited by:

    1. Laurens Cherchye & Bram De Rock & Khushboo Surana, 2024. "Marital Matching, Labor Market Participation and Individual Welfare Analysis," Working Papers ECARES 2024-07, ULB -- Universite Libre de Bruxelles.
    2. Obermeier, Tim, 2022. "Individual Welfare Analysis: What's the Role of Intra-Family Preference Heterogeneity?," VfS Annual Conference 2022 (Basel): Big Data in Economics 264101, Verein für Socialpolitik / German Economic Association.
    3. Ugo Bolletta & Laurens Cherchye & Thomas Demuynck & Bram De Rock & Luca Paolo Merlino, 2024. "Identifying Marriage Markets," Working Papers ECARES 2024-12, ULB -- Universite Libre de Bruxelles.

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    More about this item

    Keywords

    household consumption; marital stability; unobserved match quality; revealed preference analysis; intrahousehold allocation;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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