Collective and Unitary Models: A Clarification

In this note we identify and clarify a confusion that has arisen in the literature about the exact relationship between unitary and collective models and what enters the Pareto weight and the sharing function. We suggest that we should denote as ‘unitary’ any model that leads to outcomes that satisfy the Slutsky conditions whether or not these outcomes depend on distribution factors. In particular, income pooling is neither necessary nor sufficient for a unitary model. We also show that the presence of prices or total expenditure in the sharing rule cannot be used as a test for a unitary model.

Valérie LecheneEmail: