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Household Composition and Preferences: A Collective Approach to Household Consumption

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  • Bart van Leeuwen
  • Rob Alessie
  • Jochem de Bresser

Abstract

This paper tests whether preferences over bundles of market goods are different for single persons and members of couples. We use a collective model which incorporates economies of scale in consumption. Detailed individual consumption data enable us to estimate a model that allows individual preferences for some goods to depend on household composition. The hypothesis that singles and couple members of the same gender have the same preferences is rejected. This suggests that preferences may change when household composition changes. We produce indifference scales for members of couples and a refined poverty line measure for couples. Indifference scales for women and men are respectively 81 and 59 percent of their household’s expenditure. These measures are highly sensitive to the preference equality assumption.

Suggested Citation

  • Bart van Leeuwen & Rob Alessie & Jochem de Bresser, 2021. "Household Composition and Preferences: A Collective Approach to Household Consumption," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(3), pages 591-615, September.
    • Handle: RePEc:bla:revinw:v:67:y:2021:i:3:p:591-615
    DOI: 10.1111/roiw.12483
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    References listed on IDEAS

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