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"Chiappori, Pierre-André"
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Economics of the family
\"The family is a complex decision unit in which partners with potentially different objectives make consumption, work, and fertility decisions. Couples marry and divorce partly based on their ability to coordinate these activities, which in turn depends on how well they are matched. This book provides a comprehensive, modern, and self-contained account of the research in the growing area of family economics. The first half of the book develops several alternative models of family decision making. Particular attention is paid to the collective model and its testable implications. The second half discusses household formation and dissolution and who marries whom. Matching models with and without frictions are analyzed and the important role of within-family transfers is explained. The implications for marriage, divorce, and fertility are discussed. The book is intended for graduate students in economics and for researchers in other fields interested in the economic approach to the family\"-- Provided by publisher.
Book
Partner Choice, Investment in Children, and the Marital College Premium
We construct a model of household decision-making in which agents consume a private and a public good, interpreted as children's welfare. Children's utility depends on their human capital, which depends on the time their parents spend with them and on the parents' human capital. We first show that as returns to human capital increase, couples at the top of the income distribution should spend more time with their children. This in turn should reinforce assortative matching, in a sense that we precisely define. We then embed the model into a transferable utility matching framework with random preferences, à la Choo and Siow (2006), which we estimate using US marriage data for individuals born between 1943 and 1972. We find that the preference for partners of the same education has significantly increased for white individuals, particularly for the highly educated. We find no evidence of such an increase for black individuals. Moreover, in line with theoretical predictions, we find that the \"marital college-plus premium\" has increasedfor women but not for men.
Journal Article
The Econometrics of Matching Models
Many questions in economics can be fruitfully analyzed in the framework of matching models. Until recently, empincal work has lagged far behind theory in this area. This review reports on recent developments that have considerably expanded the range of matching models that can be taken to the data. A leading theme is that in such twosided markets, knowing the observable characteristics of partners alone is not enough to credibly identify the relevant parameters. A combination of richer data and robust, theory-driven restrictions is required. We illustrate this on leading applications.
Journal Article
RELATIVE RISK AVERSION IS CONSTANT: EVIDENCE FROM PANEL DATA
Most classical tests of constant relative risk aversion (CRRA) based on individual portfolio composition use cross-sectional data. Such tests must assume that the distributions of wealth and preferences are independent. We use panel data to analyze how individuals' portfolio allocation between risky and riskless assets varies in response to changes in total financial wealth. We find the elasticity of the risky asset share to wealth to be small and statistically insignificant, supporting the CRRA assumption; this finding is robust when the sample is restricted to households experiencing large income variations. In addition, we find a small but significant negative correlation between wealth and risk aversion. Various extensions are discussed.
Journal Article
The marriage market, labor supply, and education choice
We develop an equilibrium life cycle model of education, marriage, labor supply, and consumption in a transferable utility context. Individuals start by choosing their investments in education anticipating returns in the marriage market and the labor market. They then match on the basis of the economic value of marriage and preferences. Equilibrium in the marriage market determines intrahousehold allocation of resources. Following marriage households (married or single) save, supply labor, and consume private and public commodities under uncertainty. Marriage thus has the dual role of providing public goods and offering risk sharing. The model is estimated using the British Household Panel Survey.
Journal Article
FROM AGGREGATE BETTING DATA TO INDIVIDUAL RISK PREFERENCES
We show that even in the absence of data on individual decisions, the distribution of individual attitudes towards risk can be identified from the aggregate conditions that characterize equilibrium on markets for risky assets. Taking parimutuel horse races as a textbook model of contingent markets, we allow for heterogeneous bettors with very general risk preferences, including non-expected utility. Under a standard single-crossing condition on preferences, we identify the distribution of preferences among the population of bettors and we derive testable implications. We estimate the model on data from U.S. races. Specifications based on expected utility fit the data very poorly. Our results stress the crucial importance of nonlinear probability weighting. They also suggest that several dimensions of heterogeneity may be at work.
Journal Article
Analyzing matching patterns in marriage: Theory and application to Italian data
Social scientists have long been interested in marital homogamy and its relationship with inequality. However, measuring homogamy is not straightforward, particularly when one is interested in assessing marital sorting based on multiple traits. In this paper, we argue that Separate Extreme Value (SEV) models not only generate a matching function with several desirable theoretical properties, but they are also suited for the study of multidimensional sorting. Specifically, we use rich small-scale survey data to examine sorting among parents of school-age children in Naples. We show that homogamy is pervasive; not only do men and women sort by age, education, and physical characteristics, but they also look for partners that share similar health-related behavior and risk attitude. However, we also show that these marital patterns are well explained by a low number of dimensions, the most important being age cohort and human capital. In particular, human capital relates to various \"outcomes\" of the post-matching relationship. Children of parents with a high human capital endowment perform better at school, although they report lower levels of subjective well-being and of perceived quality of relationship with their mothers.
Journal Article
The Theory and Empirics of the Marriage Market
This article reviews recent developments in the literature on marriage markets. A particular emphasis is put on frameworks based either on frictionless matching models with transfers or on search models.
Journal Article
Changes in Assortative Matching and Inequality in Income
The extent to which like-with-like marry is important for inequality as well as for the outcomes of children who result from the union. In this paper, we present evidence on changes in assortative mating and its implications for household inequality in the UK. Our approach contrasts with others in the literature in that it is consistent with an underlying model of the marriage market. We argue that a key advantage of this approach is that it creates a direct connection between changes in assortativeness in marriage and changes in the value of marriage for the various possible matches by education group. Our empirical results do not show a clear direction of change in assortativeness in the UK between the birth cohorts of 1945–54 and 1965–74. We find that changes in assortativeness pushed income inequality up slightly, but that the strong changes in education attainment across the two cohorts contributed to scale down inequality.
Journal Article
Gary Becker's A Theory of the Allocation of Time
Becker's (1965) paper, 'A Theory of the Allocation of Time' revolutionised the modelling of household behaviour, by unifying Marshallian demand functions for goods with labour supply and related time use decisions within the household. In this article, we first summarise Becker's time allocation model and associated key contributions, then we show how his original framework extends to modern collective household models.
Journal Article