DP15924 The More the Poorer? Resource Sharing and Scale Economies in Large Families

Author(s): Rossella Calvi, Jacob Penglase, Denni Tommasi, Alexander Wolf
Publication Date: March 2021
Keyword(s): Barten scales, collective model, Household bargaining, indifference scales, poverty, resource shares, Scale Economies
JEL(s): C31, D11, D12, D13, I32
Programme Areas: Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15924

In large families, individuals must share resources with many others, but may benefit from economies of scale. This paper studies individual consumption in different types of households, with a focus on family structures that are common in developing countries. Based on a collective household model, we develop a methodology to identify intra-household resource allocation and the extent of joint consumption. We apply our methodology using data from Bangladesh and Mexico and compute poverty rates for men, women, and children. Contrary to existing poverty calculations that ignore either intra-household inequality or economies of scale in consumption, ours account for both dimensions.