Estimation of sharing rule: an application of intra-household collective model on Indian data

Abstract

Purpose Many aspects of well-being depend critically on individual-level expenditure and consumption. The Millennium Development Goals include the promotion of gender equality and the empowerment of women, which partly have to do with women’s access to resources within households. Many important questions in labour, public and development economics also hinge on the intra-household distribution of resources. This paper aims to estimate the resource shares within a household in the rural and urban sectors of West Bengal through a collective household model, where each household member has a specific utility function. The sharing rule parameters, that determine the apportionment of resources between members within a household, are estimated in an intra-household collective framework. The analysis is based on a system of log-quadratic Engel curves estimated using the 68th round (2011–2012) household-level consumption expenditure data of the Indian National Sample Survey Office (NSSO) for rural and urban sectors separately for the state of West Bengal. Design/methodology/approach The sharing rule parameters (that determine the apportionment of resources between members) within a household are estimated in an intra-household collective framework as suggested by Dunbar et al. (2013). The analysis is based on a Quadratic Almost Ideal Demand System (QUAIDS) estimated using the 68th round (2011–2012) household-level consumption expenditure data of the Indian NSSO. Findings In this paper, the authors estimate the sharing rule of total household expenditure between couples in a household in the state of West Bengal. They use a modified version of the QUAIDS and the 68th round (2011–2012) household-level consumer expenditure data provided by the NSSO. From the exercise, it emerges that on an average, the resource shares between husband and wife in a household is about 66:34% in the rural sector and about 60:40% in the urban sector. Based on a classification of households by the distribution of resource shares, where higher resource share for the husband is classified as “Husband dominated” and the reverse as “Wife dominated”, the percentage of “Husband dominated” households is much more in both sectors. This unequal distribution of resources may have far-reaching consequences on allocation of expenditure on the children of the household. The authors leave this exercise as a future project. Originality/value This paper is an attempt to estimate the sharing rule for households using NSSO consumption expenditure data. This paper also highlights the intra household unequal resource allocation through the sharing rule. They use a modified version of the QUAIDS and the 68th round (2011–2012) household-level consumer expenditure data provided by the NSSO. From the exercise, it emerges that on an average, the resource shares between husband and wife in a household is about 66:34% in the rural sector and about 60:40% in the urban sector. Based on a classification of households by the distribution of resource shares, where higher resource share for the husband is classified as “Husband dominated” and the reverse as “Wife dominated”, the percentage of “Husband dominated” households is much more in both sectors. This unequal distribution of resources may have far-reaching consequences on allocation of expenditure on the children of the household. The authors leave this exercise as a future project.