• Table of Contents
    • Abstract
    • Keywords
    • Article
      • Unitary models
      • Non-unitary models
        • Cooperative bargaining models
        • The ‘collective’ approach
        • Non-cooperative bargaining models
        • Intertemporal models
      • Empirical evidence
      • Conclusion
    • See Also
    • Bibliography
    • How to cite this article

family decision making

Shelly Lundberg and Robert A. Pollak
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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Abstract

The classic unitary model assumes that households maximize a household utility function and implies resource ‘pooling’ – household behaviour does not depend on individuals’ control over resources within the household. Since the 1980s, economists have modified the unitary model in ways that have theoretical, empirical and practical implications. Non-unitary alternatives based on joint decision-making by individual family members with distinct preferences broaden the range of observable behaviour consistent with economic rationality. Many non-unitary models imply that both individuals’ control over resources and ‘environmental factors’ can affect intra-household allocation. Empirical evidence has consistently rejected income pooling and, hence, the unitary model.
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Keywords

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Article

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How to cite this article

Lundberg, Shelly and Robert A. Pollak. "family decision making." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 17 April 2014 <http://www.dictionaryofeconomics.com/article?id=pde2008_F000290> doi:10.1057/9780230226203.0549

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