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Review of Economics of the Household

, Volume 13, Issue 1, pp 73–93 | Cite as

Pooling of income and sharing of consumption within households

  • Jens BonkeEmail author
Article

Abstract

There is extensive literature in economics and economic psychology on the allocation of household income within the household. In economics this refers to household decisions being independent of who generates the income in the household; in economic psychology it refers to the management of household finances. Here, we consider the link between the two concepts using a Danish expenditure survey providing information on both notions and on the assignment of expenditures. More importantly, we investigate whether either type of pooling is related to the sharing of expenditures between the two partners, and whether there are different correlations between the income distribution and the sharing of expenditures among double-career couples and other couples. We find that in most households the income distribution is correlated with the sharing of consumption—the economic approach—and that this holds true even if the household pools its resources—the economic psychology approach, implying that there is no strong relationship between the two approaches.

Keywords

Household production and intra-household allocation Personal income, wealth and their distributions Methodology for collecting, estimating, and organizing microeconomic data Marriage and family 

JEL Classifications

D13 D31 C81 

Notes

Acknowledgments

Thanks to the participants of the workshop on the labor market behavior of couples: how do they work? Nice 13–14 June 2008 for their comments and in particular to Ray Rees and Shoshana Grossbard for a constructive discussion of a previous version of this paper. Special thanks is given to Martin Browning for his engagement in this project, and to Frances Woolley and the referees for their suggestions about how to improve the paper. Lastly, the editor Shoshana Grossbard’s final suggestions to improve the paper are acknowledged. All remaining errors are those of the author.

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Rockwool Foundation Research UnitCopenhagenDenmark

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