T H ESTING THE OUSEHOLDS EHAVIOR OF OMANIAN确定阿曼人的流血行为.pdfVIP

TESTING THE BEHAVIOR OF ROMANIAN 7. HOUSEHOLDS1 Bianca PĂUNA∗ Abstract This article aims to answer questions related to which model is more adequate to describe the Romanian household’s behavior. There are two types of models, which are used whenever one attempts to model household allocation decision: the common utility model and the collective model. In this paper we test both the implications of the common utility model and the implications of the collective model using Romanian household data. The results are very strong. The common utility model fails to describe accurately the household’s behavior, while the restrictions that the collective model imposes on the demand functions are supported by the Romanian household data. Keywords: household allocation, common utility model, collective model JEL Classification: D12, D13 The question of how to model household behavior has received much attention lately. There are two approaches to this problem. The first one draws on the individual utility model, and generalizes it to households by assuming that they are characterized by a common utility function. This approach is attractive especially due to its simplicity and the demands it puts on the data set; it requires information aggregated at the household level, which is the way information was generally collected. Unfortunately, it can lead to misleading results, especially in cases when who gets what in terms of income is influencing the household consumption decision. Recently, there has been extensive work devoted to models that take the individuality of households into consideration. These classes of models are closer to reality, but more difficult to compute and test and require information, at least about income, disagg