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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 rationalise both the observed matches and the within-household allocations of time and money.
Authors
Research Associate University of Copenhagen
Martin is an IFS Research Associate, a Nuffield Senior Research Fellow and a Professor of Economics at the University of Oxford.
Research Associate Katholieke Universiteit Leuven
Laurens is a Research Associate of the IFS and a Professor in the Department of Economics, KU Leuven.
Research Associate Université libre de Bruxelles
Bram is a Research Associate of the IFS, a Professor of Economics at ULB and a Professor of Mathematics and Statistics at KU Leuven.
Research Associate University of Leuven
Frederic is a Research Associate of the IFS, a Professor of Economics at the University of Leuven and a Research Fellow at the CEPR.
Thomas Demuynck
Working Paper details
- DOI
- 10.1920/wp.ifs.2021.3121
- Publisher
- Institute for Fiscal Studies
Suggested citation
Browning, M et al. (2021). Stable marriage, household consumption and unobserved match quality. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/stable-marriage-household-consumption-and-unobserved-match-quality (accessed: 4 May 2024).
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