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  • Cited by 2
  • Print publication year: 2009
  • Online publication date: May 2010

3 - Household models: theory



This chapter surveys the literature on theoretical models of the household, paying particular attention to some of the earlier contributions, and using them to place the current state of the theory in perspective. The first and most basic distinction we make is that between models which analyse the decisions of a single consumer/worker, and those that begin with the view of a household as consisting of more than one individual. We reserve the term ‘household models’ for the latter, and call the former ‘individual models’. We define a household as a set of two or more individuals who live together and are involved in joint (pairwise or group) decision-taking in respect of their allocations of time and money. Models of the household in this sense, also commonly called ‘family models’, are the subject of this chapter.

A second distinction concerns the purpose the models are meant to serve. Here we can contrast the approaches of the two early pioneers in this field, Paul A. Samuelson and Gary S. Becker. In his classic paper on social indifference curves, Samuelson noted that his proof that these indifference curves could not exist, in the sense that they constitute a preference map with the same properties as that in the individual model, presented major problems for the theory of consumer demand, since observed household demands must in general be aggregates of demands of the individuals in the household.