In this paper, we estimate a collective model of household consumption and test the restrictions of collective rationality using z-conditional demands in the context of a large Conditional Cash Transfer programme in rural Mexico. We show that the model is able to explain the impacts the programme has on the structure of food consumption. We use two plausible and novel distribution factors, that is variables that describe the mechanism by which decisions are reached within the household: the random allocation of a cash transfer to women, and the relative size and wealth of the husband and wife's family networks. We find that the structure we propose does better at predicting the effect of exogenous increases in household income than an alternative, unitary, structure. We cannot reject efficiency of household decisions.
Orazio is an International Research Fellow at the IFS, a Professor at Yale and a Research Associate at the National Bureau of Economic Research.
Research Fellow University College London
Valerie, a Research Fellow of the IFS, is a Reader at the University College London, whose research is focused on modelling intra-household behaviour.
Working Paper details
- Insitute for Fiscal Studies
Attanasio, O and Lechene, V. (2013). Efficient responses to targeted cash transfers. London: Insitute for Fiscal Studies. Available at: https://ifs.org.uk/publications/efficient-responses-targeted-cash-transfers (accessed: 3 December 2023).
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