Erratum to: Equivalence scales,the cost of children and household consumption patterns in Italy

This article deals with the estimation of parametric equivalence scales for Italian households with different demographic characteristics: composition, location and number of employed members in the household. Using a sample of 43,701 observations on monthly current expenditures from 1997 to 2004 we estimate a demand system for ten goods and we tackle the problem of corner solutions for some goods adopting the Two Step estimator proposed by Shonkweiler and Yen (Am J Agric Econ 81:972–982, 1999). The consumption behavior of households is also analyzed calculating compensated, uncompensated and expenditure elasticites for each commodity. By considering households that differ in composition (number of children), geographic location (four-different macro-areas of Italy), and number of employed adults, we allow for a range of useful comparisons.     

Why do families actually pool their income? Evidence from Denmark

This paper analyzes income-pooling by using a unique Danish data set that includes questions on income pooling among 1,696 couples. The analyses show that most Danish households use some kind of income pooling and that the proportion of income pooled varies considerably according to individual characteristics (age, education, occupation, past partners, upbringing) and household characteristics (household income, duration of marriage, location of residence and the existence of public goods, including children). However, when all variables are evaluated in a common model, the duration of marriage and the existence of children predominantly affect the likelihood of income pooling.

A public good version of the collective household model: an empirical approach with an application to British household data

In this paper we consider an empirical collective household model of time allocation for two-earner households. The novelty of this paper is that we estimate a version of the collective household model, where the internally produced goods and externally purchased goods are assumed to be public. The empirical results suggest that (1) Preferences of men and women differ; (2) Although there are significant individual variations, on average the utility functions of men and women are equally weighted in the household utility function; (3) Differences in the ratio of the partners’ hourly wages are explanatory for how individual utilities are weighted in the household utility function. (4) The female’s preference for household production is influenced by family size, but this does not hold for the male; (5) Both the male and the female have a backward-bending labor supply curve; (6) Labor-supply curves are forward-bending with respect to the partner’s wage rate; (7) Our model rejects the unitary Slutsky symmetry condition.

Children and Demand: Direct and Non-Direct Effects

This paper examines the effects of children on demands. We employ a French family expenditure survey that has a number of unusual features to explore the source of the correlation between children and demands. The first sample we use is of older households which has information on completed fertility. The second sample is of younger households for whom we have family background variables. We find that children are not exogenous for some goods. These findings cast doubt on the usual practice of identifying direct children effects with the coefficients on the children variables in demand equations.     

Consumer Debt Repayment Behavior as a Precursor to Bankruptcy

The passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 culminated years of debate over the escalating number of bankruptcy filings and whether or not consumers were abusing the bankruptcy system. Our study focuses on the extent to which households seek bankruptcy protection without first attempting to restructure their debt or experiencing indicators of financial distress. Through multivariate regression analyses of longitudinal data from the Panel Study of Income Dynamics (PSID), we find a significant relationship between having prior financial problems and filing for bankruptcy. Our results also indicate that households that obtained consolidation loans were equally likely to file for bankruptcy as those that did not. We conclude that early interventions with financially distressed consumers may provide opportunities to reduce bankruptcy filings.

How Employed Mothers in Australia Find Time for Both Market Work and Childcare

Time use studies find that employed mothers reduce their parental childcare time by much less than an hour for every hour they spend in market work. This paper uses data from the Australian Bureau of Statistics Time Use Survey 1997 (4,059 randomly selected households) to investigate how employed mothers manage to avoid a one-for-one trade-off between work and childcare. It compares the time allocation of employed fathers, employed mothers and non-employed mothers and finds that parents use non-parental childcare to reschedule as well as to replace their own childcare, that employed mothers reschedule activities from weekdays to weekends or to earlier or later in the day, and spend less time than other mothers in housework, childfree leisure and personal care.

Can faster income growth reduce well-being?

In his book Luxury Fever: Why Money Fails to Satisfy in an Era of Excess (1999) economist Robert Frank describes a number of significant trends in the U.S., and to a lesser extent in other industrial economies, since the late 1970s: rapidly rising incomes, for those at the upper end of the income scale, increasing hours of work, and increased consumerism (share of consumption of ‘status goods’). We demonstrate that the first development can parsimoniously account for the latter two. Our novel specification of the utility function simultaneously incorporates a relative-consumption effect for status goods and non-homotheticity of preferences between status and non-status goods, and we also allow for endogenous labour–leisure choice. It is possible that well-being has declined, notwithstanding the faster income growth, or at least not risen pari passu with the growth in earnings. Comparisons are made with other studies, and policy implications briefly discussed.

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Effects of Consumer Goods Shortages on Fertility in Post-Soviet Economy

This study makes two contributions to the study of family and economic issues. First, it investigates the effects of consumer-market shortage on fertility. Second, it considers the effects on fertility of eliminating consumer-market shortage using a survey of families from the Former Soviet Union. The estimated model of fertility showed that consumer goods shortage and fertility were positively related. The elimination of consumer goods shortage would, therefore, be expected to lower aggregate number of children in the transition (post-Soviet) economies.

Interfamily economic exchange: A function of culture or economics?

This study explores differences in inter-household exchange of goods and services in Anglo- and Mexican-American families controlling for income level and for ethnicity. The extent of such exchange, its perceived importance to the family's quality of life, satisfaction with the exchange, and the relation of persons in the exchange process are examined. Significant differences are found more often between higher income Anglo- and Mexican-Americans than between low-income families, both in the family providing goods and services for others and in the receipt of them. Higher income Mexican-American families are more likely than their Anglo- counterparts to exchange with relatives. Ethnic effects are more prevalent in higher income households than in low-income households. Economic effects are more predominant than ethnic effects.This study contributes to interregional Agricultural Experiment Station Research Project NC-128, Quality of Life as Influenced by Area of Residence. Cooperating states: Arizona, California, Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Nevada, Ohio, Texas.Flora L. Williams' current research interests include income adequacy, financial problems, and indicators of change in economic well-being. She is an Associate Professor, Consumer Sciences and Retailing, Purdue University, West Lafayette, IN 47907.     

How bad can a voting location be

Two questions concerning the location of a single facility by a voting process are investigated for transportation networks:

- What is the maximum number of customers located on the network preferring some rival point over a voting solution?

- How does the average distance of the customers to the facility increase when a voting location instead of a Weber location is chosen for the facility?

Complete answers are given for general networks and for certain planar networks, viz., the so-called generalized cacti.     

Effect of consumption choices on fluxes of carbon,nitrogen and phosphorus through households

Households are an important scale of analysis for human ecosystems because they are a major source of pollutants and could thus be a new focus for pollution management, particularly for education-based source reduction strategies. The household is also a meaningful unit for analysis of human ecosystems, being common to all human cultures. This study develops a Household Flux Calculator (HFC) to compute C, N, and P fluxes for scenarios intended to represent three levels of household consumption: low, typical, and high. All three scenarios were developed for suburban households with two adults and two children in the Minneapolis-St. Paul (Twin Cities) metropolitan area, Minnesota. Calculated ratios of fluxes between high and low consumption households were 3.5:1 for C, 2.7:1 for N and 1.4:1 for P. Results suggest a high level of discretionary consumption that could be reduced without a substantial reduction in standard of living. Thus, modest changes in behavior in high consumption households would greatly reduce fluxes of C, N, and P without major changes in lifestyle.

Path to Poverty Alleviation: Marriage or Postsecondary Education?

We examined the role of human capital in determining economic well-being and marital status of mothers with children. We analyzed 1996 data from the Survey of Income and Program Participation (SIPP), a nationally representative survey of 36,700 American households conducted by the Census Bureau. The results indicate that among the human capital variables postsecondary education significantly improves the economic well-being of mothers irrespective of their marital status. Also, educated mothers are more likely to be married. These findings are especially relevant as we debate the importance of marriage in poverty alleviation.

No externalities: a characterization of efficiency and incentive compatibility with public goods

We show that efficient anonymous incentive compatible (dominant strategy) mechanisms for public goods eliminate externalities, i.e., each individual is unable to change the welfare of anyone else. The characterization is used to derive existence and non-existence results for models with a finite number of individuals and to explain existence results in the continuum. A similar characterization and conclusions are demonstrated for private goods in (J Econ Theory 85:169–225, 1999). However, unlike private goods, elimination of externalities with public goods implies that individuals cannot change the outcome. Hence, such mechanisms provide only weak incentives for truth-telling.     

The relation between monotonicity and strategy-proofness

The Muller–Satterthwaite Theorem (J Econ Theory 14:412–418, 1977) establishes the equivalence between Maskin monotonicity and strategy-proofness, two cornerstone conditions for the decentralization of social choice rules. We consider a general model that covers public goods economies as in Muller–Satterthwaite (J Econ Theory 14:412–418, 1977) as well as private goods economies. For private goods economies, we use a weaker condition than Maskin monotonicity that we call unilateral monotonicity. We introduce two easy-to-check preference domain conditions which separately guarantee that (i) unilateral/Maskin monotonicity implies strategy-proofness (Theorem 1) and (ii) strategy-proofness implies unilateral/Maskin monotonicity (Theorem 2). We introduce and discuss various classical single-peaked preference domains and show which of the domain conditions they satisfy (see Propositions 1 and 2 and an overview in Table 1). As a by-product of our analysis, we obtain some extensions of the Muller–Satterthwaite Theorem as summarized in Theorem 3. We also discuss some new “Muller–Satterthwaite preference domains” (e.g., Proposition 3).     

Der Einfluss der Gruppengröße auf die Aktivität von Parteimitgliedern

In this paper, we aim to test Olson’s (The logic of collective action: Public goods and the theory of groups, Cambridge, Harvard University Press, 1965) assumptions of group size effects on free-riding tendencies in political parties. Multilevel analyses of the Deutsche Parteimitgliederstudie (German Party Membership Study) 2009 reveal that for members of the CDU, CSU, SPD, FDP and Bündnis 90/Die Grünen, the assumed negative relationship between the number of party members in the district association and their individual level of activity can only be shown for the eastern states of Germany. Moreover, we show that selective incentives are not suitable for reducing the negative impact of a increasing membership figure, while normative incentives are associated with an increasing free-riding tendency with increasing number of members in the western and eastern Bundesländer. Our results only partly support the assumptions on collective action problems and point to a need for further theoretical and empirical research on group size effects and on the role incentives’ play in explaining the activity in political parties.     

Assessing the geographic distribution of same sex and opposite sex couples across the United States: implications for claims of causality between traditional marriage and same sex unions

The percent of households headed by married couples has recently fallen below 50%, while the percent of unmarried couples (both heterosexual and homosexual) continues to rise. Nationally-representative estimates of unmarried couples which first appeared in the 1990 and 2000 decennial Censuses are now available on an annual basis through the American Community Survey. In this paper we use state-level panel data from 2000–2006 on the percent of households headed by married couples, same sex couples and opposite sex unmarried couples to assess widespread claims in the popular press of causality across living arrangements. Based on Granger causality tests we can reject claims that an increase in same sex couples has caused either a decline in marriage or (except in one case) an increase in heterosexual cohabitation. There is mixed evidence whether or not opposite sex couples may have Granger caused same sex couples, but stronger evidence that marriage and heterosexual cohabitation are interrelated.

Who cares and how much: exploring the determinants of co-residential informal care

The importance of informal care provided inside the household (co-residential care) is widely acknowledged in policy circles. However, the factors that determine the likelihood and scale of provision are not fully understood. A two-part model (2PM) is used to investigate both participation and levels of provision. Random effects dynamic panel specifications are employed. Results show that co-residential informal care competes with other time demanding activities, such as childcare and employment. Wealthier individuals are less likely to be caregivers, whereas wealthier households have a higher tendency towards caregiving. Evidence of both substitution and complementarity is found between formal and informal care. Informal care and health status are significantly related, with carers more likely to report worse General Health Questionnaire scores than non-carers. Finally, significant dynamic effects are observed with the continuance of the provision of informal care being more likely than the initiation of such activity, while heavy commitment in the past increases the hours provided in the current period.

Factors Affecting Alcohol Purchase Decisions and Expenditures: A Sample Selection Analysis by Ethnicity in Malaysia

Heckman’s sample selection model was applied to data from the Malaysian Household Expenditure Survey 2004/2005 to examine the factors influencing the likelihood of purchasing and the amount spent on alcohol in Malaysia. Results of the marginal effects suggest that while socio-demographic factors are important determinants of household purchase decisions and expenditure levels on alcohol in Malaysia, the effects vary across ethnic groups. Specifically, although education had a significant but modest impact in reducing the probability of alcohol purchases and expenditure levels among ethnic Chinese households, this effect was not evident among the ethnic Indians and other races. While increasing household size lowered the likelihood of purchasing alcohol and its expenditure levels for all ethnic groups, the reinforcing effects of both income and gender were relevant only for ethnic Chinese and Indian households. Last, urban Indian households were less likely to purchase alcohol and spend less compared to rural Indian households.

Strategy-proof allocation of multiple public goods

This paper characterizes strategy-proof social choice functions (SCFs), the outcome of which are multiple public goods. Feasible alternatives belong to subsets of a product set . The SCFs are not necessarily “onto”, but the weaker requirement, that every element in each category of public goods A _k is attained at some preference profile, is imposed instead. Admissible preferences are arbitrary rankings of the goods in the various categories, while a separability restriction concerning preferences among the various categories is assumed. It is found that the range of the SCF is uniquely decomposed into a product set in general coarser than the original product set, and that the SCF must be dictatorial on each component B _l . If the range cannot be decomposed, a form of the Gibbard–Satterthwaite theorem with a restricted preference domain is obtained.