Sharing of Resources Within the Family and the Economics of Household Decision Making

Abstract

Over the last 3 decades, economic models have been developed that recognize that potentially conflicting interests may shape household decisions and the sharing of resources within families. This article provides an overview of how decision making within households has been modeled within economics, presents the main benefits and limitations of those models, and critically assesses their usefulness to researchers from other disciplines interested in the within‐ household distribution of resources. The main focus is on the theory, empirical application, and results of the currently dominant collective models, but the authors also look at developments that led up to them and some subsequent extensions and alternative approaches. Given the weight placed by policymakers and others on economic and quantitative evidence, it is incumbent on researchers of all disciplines to understand the achievements and limitations of the models used, explicitly or implicitly, to produce such evidence and the assumptions that lie behind them.

Who Coresides With Parents? An Analysis Based on Sibling Comparative Advantage

“…This theoretical framework is widely used in the fields of demography, economics, and sociology (Ashenfelter and Heckman 1974;Brines 1994;Gershuny and Robinson 1988;Himmelweit et al 2013). Yet, studies usually focus only on division of labor within a nuclear family (e.g., division of labor between husbands and wives).…”

Researching Within‐Household Distribution: Overview, Developments, Debates, and Methodological Challenges

“…These theories resemble those underlying some economic models of the household (Himmelweit & Santos, ; see also Lundberg, ). Unitary models assume that the household acts as one, with a single “utility function” (Becker, ; Bolt & Bird, ), and resources deployed to best effect to realize it—on the condition that one member (usually the household head) has the power and altruism to bring this about (Himmelweit, Santos, Sevilla‐Sanz, & Sofer, , this issue). From the 1970s, however, this model was challenged.…”

Individual Wealth and Subjective Financial Well‐being in Marriage: Resource Integration or Separation?

“…Does it matter which spouse individually owns wealth within marriage? To answer this question, many scholars (implicitly or explicitly) follow a unitary household model that assumes that economic resources are pooled to maximize a joint utility function (Becker, ; Himmelweit, Santos, Sevilla, & Sofer, ). According to this model, it does not matter which spouse individually owns wealth because it is irrelevant to the benefit that either derives from it.…”