Preferences and Policies: An Intra-Household Demand System


Correspondence: Michael Malcolm, Department of Economics, West Chester University of Pennsylvania, 700 South High St, West Chester, PA 19383. Email:


I estimate a household demand system with specific focus on allocation to children, adults and joint household goods. The main finding is that marginal dollars are spent disproportionately on adult-assignable goods relative to the way in which the average dollar is spent. The estimation provides both income effects and a complete set of cross-price effects, which informs analysis both of income transfers and of policies that induce relative price changes. Contrasted with earlier work, the demand system in this paper covers nearly all household expenditures. I show bias that results from reduced-form systems.