Self-reported economic condition and home production: intra-household allocation in Italy

This paper applies a collective model of intra-household welfare distribution using individual self-reported data. The model accounts for household production, and self-reported information on economic condition is used to identify the sharing rule governing the bargaining process in the family. The theoretical framework implies a broad concept of full income, which includes household production as time allocated to domestic activities. We find that self-reported data on economic status are useful in recovering individual shares of household income and that both wages and nonstrictly- economic individual variables play an important role in the bargaining process determining the sharing rule in Italy.