Welfare Analysis of Fiscal Reforms in Europe: Does the Representation of Family Decision Processes Matter? Evidence from Italy

SERIES Working Paper No. 7

Posted: 24 May 2011

See all articles by Maria Concetta Chiuri

Maria Concetta Chiuri

University of Salerno - Centre for Studies in Economics and Finance (CSEF); Università degli Studi di Bari

Ernesto Longobardi

Università degli Studi di Bari “Aldo Moro” (UNIBA)

Date Written: January 1, 2002

Abstract

This paper adopts a “piece-meal” approach to empirically identify, on a sample of Italian households, a collective model where both nonparticipation and non-convex budget sets are allowed for. Two tax reforms, i.e. the 2002 tax changes recently introduced in Italy and a revenue neutral linear income tax are evaluated by the collective framework derived. The predictions obtained for individual labour supplies, income and welfare distribution are then compared with those of a traditional unitary model. The exercise provide an assessment of the distortion introduced in positive and normative analyses when individuals are assumed to behave as if in a unitary, rather than in a collective world. The results suggest that further efforts should be devoted to the analysis of intra-household decision models.

Keywords: Collective models, intra household allocation, tax reform

JEL Classification: D11, D12, J22

Suggested Citation

Chiuri, Maria Concetta and Longobardi, Ernesto, Welfare Analysis of Fiscal Reforms in Europe: Does the Representation of Family Decision Processes Matter? Evidence from Italy (January 1, 2002). SERIES Working Paper No. 7, Available at SSRN: https://ssrn.com/abstract=1850747

Maria Concetta Chiuri

University of Salerno - Centre for Studies in Economics and Finance (CSEF) ( email )

CSEF
84084 Fisciano, Salerno
Italy
+39 080 504 9340 (Phone)
+39 080 504 9149 (Fax)

Università degli Studi di Bari ( email )

Piazza Umberto I
70124 Bari, 70121
Italy

Ernesto Longobardi (Contact Author)

Università degli Studi di Bari “Aldo Moro” (UNIBA) ( email )

Piazza Umberto I
Bari, 70121
Italy
+390805049103 (Phone)

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