WHEN ONE PLUS ONE IS NOT ANYMORE EQUAL TO TWO CALCULATION OF THE INTRAFAMILIAL EQUIVALENCE SCALES BY MEANS OF A COLLECTIVE MODEL

In this paper, we present a collective model with public consumption. It is based on the more general model of Browning, Chiappori and Lewbel (2004). Rather than estimating a consumption technology, which captures all economies of scale of living in a couple, we determine a priori which goods are privately and which goods are publicly consumed. The collective model is completely identified by assuming that preferences over private and public goods are the same for singles and individuals in couples. The model allows calculating intra-household based equivalence scales, which meet the objections against traditional equivalence scales. It is applied to consumption data from three recent Belgian budget surveys.