Nonparametric analysis of household labor supply: Goodness-of-fit and power of the unitary and the collective model

L.J.H. Cherchye, F.M.P. Vermeulen

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We compare the empirical performance of unitary and collective labor supply models, using representative data from the Dutch DNB Household Survey. We conduct a nonparametric analysis that avoids the distortive impact of an erroneously specified functional form for the preferences and/or the intrahousehold bargaining process. Our analysis focuses on the goodness of fit of the two behavioral models. To guarantee a fair comparison, we complement this goodness-of-fit analysis with a power analysis. Our results strongly favor the collective approach to modeling the behavior of multiperson households.
Original languageEnglish
Pages (from-to)267-274
JournalThe Review of Economics and Statistics
Volume90
Issue number2
Publication statusPublished - 2008

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labor supply
household survey
guarantee
Nonparametric analysis
Goodness of fit
Collective model
Household labor supply
performance

Cite this

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title = "Nonparametric analysis of household labor supply: Goodness-of-fit and power of the unitary and the collective model",
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Nonparametric analysis of household labor supply : Goodness-of-fit and power of the unitary and the collective model. / Cherchye, L.J.H.; Vermeulen, F.M.P.

In: The Review of Economics and Statistics, Vol. 90, No. 2, 2008, p. 267-274.

Research output: Contribution to journalArticleScientificpeer-review

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T2 - Goodness-of-fit and power of the unitary and the collective model

AU - Cherchye, L.J.H.

AU - Vermeulen, F.M.P.

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PY - 2008

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N2 - We compare the empirical performance of unitary and collective labor supply models, using representative data from the Dutch DNB Household Survey. We conduct a nonparametric analysis that avoids the distortive impact of an erroneously specified functional form for the preferences and/or the intrahousehold bargaining process. Our analysis focuses on the goodness of fit of the two behavioral models. To guarantee a fair comparison, we complement this goodness-of-fit analysis with a power analysis. Our results strongly favor the collective approach to modeling the behavior of multiperson households.

AB - We compare the empirical performance of unitary and collective labor supply models, using representative data from the Dutch DNB Household Survey. We conduct a nonparametric analysis that avoids the distortive impact of an erroneously specified functional form for the preferences and/or the intrahousehold bargaining process. Our analysis focuses on the goodness of fit of the two behavioral models. To guarantee a fair comparison, we complement this goodness-of-fit analysis with a power analysis. Our results strongly favor the collective approach to modeling the behavior of multiperson households.

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JF - The Review of Economics and Statistics

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