Essays on microeconomics of the household

These essays are concerned with the problem of cooperation among individuals in a household and among households in a community under lack of commitment. The first chapter provides a theoretical investigation of consumption patterns in a household in which income is stochastic and some expenditures are public to household members. It is shown that in the constrained efficient agreement, private expenditures of household members do not necessarily co-move, as they do in both the first-best agreement and the constrained efficient agreement when all expenditures are private. In particular, the absence of co-movement of private expenditures in the household do not necessarily imply the absence of mutual insurance; and, indeed, negative correlation in private expenditures can be consistent with a cooperative agreement. These results indicate that caution should be used in interpreting the correlation of private expenditures of household members as a measure of cooperation and mutual insurance within the household. Chapter two investigates the effect of lack of commitment on household savings in a constrained efficient mutual insurance agreement among different households.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Economics.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2006

Author dc:creator

• Wahhaj, Zaki

Advisor dc:contributor.advisor

• Abhijit Banerjee and Bengt Holmstrom.

• Economics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/37405

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/37405