Abstract

http://ssrn.com/abstract=1273557
 


 



Confronting the Robinson Crusoe Paradigm with Household-Size Heterogeneity


Christos Koulovatianos


University of Vienna - Department of Economics

Carsten Schröder


Free University of Berlin (FUB) - Department of Business and Economics

Ulrich Schmidt


University of Kiel - Institute of Economics

August 7, 2008

CFS Working Paper No. 2008/24

Abstract:     
Modern macroeconomics empirically addresses economy-wide incentives behind economic actions by using insights from the way a single representative household would behave. This analytical approach requires that incentives of the poor and the rich are strictly aligned. In empirical analysis a challenging complication is that consumer and income data are typically available at the household level, and individuals living in multimember households have the potential to share goods within the household. The analytical approach of modern macroeconomics would require that intra-household sharing is also strictly aligned across the rich and the poor. Here we have designed a survey method that allows the testing of this stringent property of intra-household sharing and find that it holds: once expenditures for basic needs are subtracted from disposable household income, household-size economies implied by the remainder household incomes are the same for the rich and the poor.

Keywords: Linear Aggregation, Representative Consumer, Equivalence Scales, Survey Method, Household-Size Economies

JEL Classification: C42, E21, D12, E01, D11, D91, D31, I32

working papers series


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Date posted: September 25, 2008  

Suggested Citation

Koulovatianos, Christos and Schröder, Carsten and Schmidt, Ulrich, Confronting the Robinson Crusoe Paradigm with Household-Size Heterogeneity (August 7, 2008). CFS Working Paper No. 2008/24 . Available at SSRN: http://ssrn.com/abstract=1273557

Contact Information

Christos Koulovatianos (Contact Author)
University of Vienna - Department of Economics ( email )
Bruennerstrasse 72
Vienna, A-1210
Austria
+43 1 4277 37401 (Phone)
+43 1 4277 9374 (Fax)
HOME PAGE: http://homepage.univie.ac.at/christos.koulovatianos/
Carsten Schröder
Free University of Berlin (FUB) - Department of Business and Economics ( email )
Boltzmannstrasse 20
D-14195 Berlin, 14195
Germany
+49 030 838-52259 (Phone)
+49 030 838-52560 (Fax)
Ulrich Schmidt
University of Kiel - Institute of Economics ( email )
Olshausenstrasse 40
24098 Kiel, 24098
Germany
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