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The Collective Farm‐household Model: Policy and Welfare Simulations
Author(s) -
Matteazzi Eleonora,
Me Martina,
Perali Federico
Publication year - 2017
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1093/aepp/ppw004
Subject(s) - economics , relevance (law) , consumption (sociology) , welfare , unitary state , dimension (graph theory) , social accounting matrix , production (economics) , wife , microeconomics , resource allocation , wage , resource (disambiguation) , public economics , labour economics , sociology , computer science , social science , mathematics , computable general equilibrium , political science , pure mathematics , law , market economy , computer network
This study develops a household enterprise model extended to encompass recent advances in collective theory. We use a simulation model in which production and consumption‐leisure choices are represented along with the rule governing intra‐household resource allocation, to analyze the income and wage responses of each family member. The household is treated as an equilibrium model whose accounts are based on a collective household accounting matrix, with the social dimension being the wife/husband classes. The simulation analysis illustrates the policy relevance of the collective approach to household behavior for inferring the impact of economic policies on individual behavior and welfare. We also propose insightful comparisons with the unitary model to make the behavioral and welfare policy relevance of the collective approach evident.