Intra-household distribution of resources and income poverty and inequality in Visegrád countries

Abstract

Purpose: The authors aim to demonstrate the impact of allowing for unequal intra-household distribution of resources on income poverty and income inequality. Design/methodology/approach: The paper applies a collective consumption model to study the intra-household distribution of resources in Visegrád countries (V4). It utilises subjective financial satisfaction as a proxy for indirect utility from individual consumption to estimate the indifference scales within couples instead of the traditional equivalence scale. The European Union Statistics on Income and Living Conditions (EU-SILC) 2013 and 2018 data are applied. Findings: This study’s results indicate substantial economies of scale from living in a couple that are generally higher than implied by the commonly applied equivalence scale. The sharing rule estimates suggest that at the mean of distribution factors, women receive a consumption share between 0.4 and 0.6; however, some of the results are close to an equal sharing of 0.5. The female consumption share rises with her contribution to household income. Regarding income poverty and inequality, the authors show that both these measures might be underestimated in the traditional approach to equal sharing of resources. Originality/value: The authors add to the empirics by estimating indifference scales for Czechia (CZ), Hungary (HU), Poland (PL) and Slovakia (SK), countries that have not been involved in previous research.