Þjóðarspegill 2008: Níunda ráðstefna um rannsóknir í félagsvísindum Allocation of Public and Private Goods within the Household Helga Kristjánsdóttir Þjóðarspegill 2008 Níunda ráðstefna um rannsóknir í félagsvísindum

Overview The objective of this research is to –Study previous literature –Combine literature with unitary model setting and model allowing for capturing individual actions in households –Come up with new approach Qs/Ans partly based on data availability –Compare results with foreign research

Introduction The research objective is to provide analysis of the allocation of public and private goods within the household. The focus is on estimating joint and individual contribution of couples to public goods within the household. Analysis is based on both survey data (time & money) and actual firm data, as to reflect on how individual household members allocate their time and financial resources, within particular households. The interaction between couples is analyzed, using game theory. Results are then compared to earlier research

Literature Overview Browning and Lechene (2001) Bonke and Browning (2003) Browning and Gørtz (2006) Browning, Chiappori and Lechene (2006) Bonke and Browning (2008)

Literature Overview Browning and Lechene (2001) –Study different intra-household models predictions on budget allocation decisions. They base their study on Canadian family expenditure survey data ( ). –Seek to determine intra household decision making –Analyze both non-cooperative and cooperative models –In order to test for the relationship between expenditures on goods and the intra-household distribution of income – test for cases of sharing or selfish individuals –They find evidence that both husbands and wives care for each other in the sense that with an unequal distribution of incomes (one high income partner) there is local income pooling.

Literature Overview Bonke and Browning (2003) –Analyze intra household welfare distribution using the Danish part of a European Community household survey from 1994, including both household questionnaire and individual questionnaire. –Firstly, they don’t find non-related individuals incomes to impact singles financial satisfaction (different from previous research). –Secondly, they find there to be a considerable difference between husbands and wives, in how they report their financial satisfaction levels. –Finally, findings indicate relative income to be the most important correlate with relative satisfaction.

Literature Overview Browning, Chiappori and Lechene (2006) –Study household behavior distributional effects, under the conditions of a non-cooperative model. –Find that either the partners contribute to different public goods or to at most one common good. At the most 1 public good that both contribute to Whether 1 public or non, that both contribute to depends on –(a) preferences (b) allocation of income –Their conclusion is that even if authorities choose to give child benefits to a particular household member, it may not necessarily affect the outcomes.

Literature Overview Browning and Gørtz (2006) –Examine use of both time and expenditures within the household. –The database is composed on information from survey of Danish households, accounting for both allocation of time and expenditures, for each individual household in the sample. –Seek to explain if the balance between consumption and leisure is due to power bargaining within the household, or difference in either productivity or preferences.

Literature Overview Bonke and Browning (2008) –Base their research on a Danish survey of expenditures. –To the conventional measures applied before, they add a survey allowing for analysis of whether expenditures are contributed to either of the parents, children or something outside the household. –They also add to the conventional survey by including questions on the management of households, family background and autonomy. –Among other things, their paper analyses the relation of clothing expenditure distribution to the other goods.

Data Corporate Data –10 year data –SAP financial system –Large Icelandic firms –Married couples Both full employment One or more child below 17 year old

Data Survey Data –Allocation of public and private goods –Measure time usage / allocation of time –Measure money usage / allocation of resources –Decomposition of consumption data –Seek for data that allow for analyzing individuals within the household, rather than the household as an individual

Summary Develop theory based on previous research Offer new theoretical approach Set up unique database for Iceland based on survey data & actual firm data Capture actions of individuals within the household in a non unitary model setting

Þjóðarspegill 2008: Níunda ráðstefna um rannsóknir í félagsvísindum