Individual consumption in collective households: Identification using repeated observations with an application to PROGRESA

Abstract

Summary Individual consumption is typically not observed for individuals living with others. Identification of individual resource shares from household expenditure data requires assumptions on preferences that are often difficult to justify. We show that individual resource shares can be identified from repeated observations under the intuitive assumption that individual preferences over a subset of goods are stable over time. Using this method to estimate the effect of PROGRESA on the intrahousehold distribution of household expenditure, and hence on individual consumption, we find unequal gains, with children's individual consumption increasing by 27.8%, fathers' consumption by 17.8%, and mothers' consumption by 5.8%.