It is widely believed that politicians allocate public resources in ways to maximize political gains. But what is less clear is whether this comes at a cost to welfare; and if so, whether alternative electoral rules can help reduce these costs. In this paper, we address both of these questions by...

This paper focuses on the identification and estimation of the intertemporal and intratemporal elasticities of substitution for the wife and separately for the husband using individual Euler equations. To that end, the household is represented as a group of agents making joint decisions. By...

Saving rates have fallen steadily in the U.S. since the 1970s. The literature has proposed numerous possible explanations for the decrease including increases in governmental insurance, changes in the distribution of income, and increases in annuitized wealth. Analysis of all three explanations...

Previous tests of efficient risk sharing have assumed that households have identical risk preferences. This assumption is equivalent to the restriction that households can pool their resources, but cannot optimally allocate them according to individual risk preferences. In this paper, we first...

We propose a method that enables one to test efficient risk sharing even when households have different risk preferences. The method is composed of three tests. The first one determines whether in the data households have homogeneous risk preferences. The second and third tests evaluate...

Previous papers have tested efficient risk sharing under the assumption of identical risk preferences. In this paper we show that, if in the data households have heterogeneous risk preferences, the tests proposed in the past reject efficiency even if households share risk efficiently. To address...

The goal of the paper is to understand causes and consequences of corruption. To that end we estimate a dynamic model of decisions by politicians. We consider a model with the following features. First, individuals in the economy have preferences over a private good and a public good. Second,...

This paper investigates how political incentives affect the allocation of public goods using data from Brazil's Federal Legislature, a setting in which federal politicians representing multi-member districts can issue budgetary amendments for public works in their respective districts. We...

In this paper, a formal test of intra-household commitment is derived and performed. To that end, two models of household intertemporal behaviour are developed. In both models, household members are characterized by individual preferences. In the first formulation, household decisions are always...