Using Self Reported Income in a Collective Model: Within-Household Income Comparisons

Type Working Paper
Title Using Self Reported Income in a Collective Model: Within-Household Income Comparisons
Author(s)
Publication (Day/Month/Year) 2005
URL http://conference.iza.org/conference_files/fam2005/sofer_c2364.pdf
Abstract
We propose a method of application of the collective model to the analysis of intra-household inequality using self reported income scales. The resources taken into account are labour, non-labour incomes and household production output. Starting with a collective model including household production under the assumption of marketable domestic goods, we look at the links between self-reported income and the theoretical results of the collective model. Members of households are assumed here to report an income level corresponding to their true income sharing. Using Russian data (Round V to VIII of the Russian Longitudinal Monitoring Survey), the model is estimated by the method of full information maximum
likelihood (FIML). We first use the results obtained with couples who report the same level of
income, interpreting this as an equal sharing of income. We then identify the sharing rule for
the whole sample: we thus propose a new method for deriving, not only the derivatives, but
the sharing rule itself.

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