Nonparametric analysis of household consumption, labour supply and welfare (NACOLAS)
This project will shed light on the consumption and labour supply choices of households. After all, the primary reason for households to supply their labour is to finance their consumption of various commodities. First, this project aims at testing the nature of household decision-making: Are individual consumption and labour supply choices based on altruism and/or inequality aversion?, Is consumption and labour supply conspicuous?, To what extent does parental child care entail process benefits, and how does this affect labour supply?, ... Second, the project also tries to recover (i.e. compute) specific features of the households' economic position. The nonparametric approach allows us to recover the distribution of money metric utility (and hence various welfare related indices) in the population. A shared feature of all these studies is the use of a nonparametric (revealed preference) methodology. This methodology is robust to parametric (mis-)specifications of individual preferences. Moreover, it allows us to study each household separately, thereby avoiding debatable pooling assumptions.