It's complicated: A Non-parametric Test of Preference Stability between Singles and Couples
TLDR
This paper develops a non-parametric method to test preference stability between singles and couples, finding that preferences are not stable.
Key contributions
- Develops a non-parametric method to use singles' data for collective household choice analysis.
- Tests the controversial assumption of preference stability between singles and couples.
- Shows preference stability implies a conditional random-utility representation for choices.
- Rejects the stability hypothesis using consumption data from Dutch, Russian, and Spanish panels.
Why it matters
This paper challenges a fundamental assumption in economic modeling: that preferences remain stable when individuals transition from single to couple. Its rejection suggests current models may misrepresent household consumption and welfare.
Original Abstract
This paper develops a method to use singles' data in a non-parametric revealed preference setting of collective household choice. We use it to test the controversial assumption of preference stability between singles and couples, without data on intra-household allocation or marital transitions. We show that, under the preference-stability hypothesis, consumption choices from an endogenously matched population admit a conditional random-utility representation over counterfactual pairings of couples and singles. Preference stability is testable as a feasibility restriction on the observed marginal choice distributions. We reject the hypothesis using consumption data from the Dutch LISS, the Russian RLMS, and the Spanish ECPF panels.
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