Resource title

Testing the Pareto efficiency of household resource allocations

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Resource description

In a careful and thorough empirical study, Christopher Udry (1996) shows convincingly that, in a large sample of West African households, household resource allocations were not Pareto efficient. This paper argues that observation of the Pareto inefficiency of a household resource allocation does not however refute the hypothesis that it chooses this resource allocation as if it maximises some form of household welfare function possessing the Pareto property. To refute that hypothesis it is necessary to show that the observed allocation does not represent a second best optimum. For this it will be necessary to show that the estimated parameters of the model lie in a region of the parameter space for which the second best optimality of the allocation does not hold.

Resource author

Patricia Apps, Ray Rees

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26367

Resource license

Adapt according to the presented license agreement and reference the original author.