4
prices to differ within the household. The single utility approach is however,
rejected by Donni & Molina (2018) and Vermeulen (2002) on a theoretical level,
arguing that the utility theory is purposive of studying individual choices and not
group choices. Formation and dissolution of the household is dependent on
individuals in household being married or divorced (Manser & Brown, 1980). As
the marriage is formed, income of family is assumed to be pooled together in
contribution to overall household (Beninger & Laisney, 2002). Schneebaum &
Mader’s (2013) definition of household, counter argues income pooling
assumption, as people do not need to be family to live together and income is not
shared even when people are family. Working hours of labour supply are based
on, income pooling assumption however the model fails to determine the source
of income (Bloemen, 2010). Dictatorship in the household is a given, as
responsibility of monitoring and sanctioning of those who fall foul of its rules and
to issue information flow and control are determined by one person (Becker, 1991).
Unitary models view of household behaviour is broad in that, it focuses on both
market and non-market activities of households, such as fertility, education of
children and allocation of time. Unitary models however fail to incorporate resource
distribution within household (Alderman et al, 1995). Due to the overall weakness
of the unitary model, alternative non-unitary representation models which focus on
intra-household decision making were adopted post 1980, after universal rejection
of the unitary approach (Donni & Molina 2018).

Collective models also known as bargaining models became popular post 1980 as
they explicitly address the issue of how individual preferences lead to collective
choices and bargaining amongst household members (Alderman et al, 1995). A
bargaining process within the household is assumed to take place as different
members have different preferences (Vermeulen, 2002). The model assumes
Pareto-optimality of allocation, which determines consumption choices and this
assumption also defines collective rationality (Beninger & Laisney, 2002).
Furthermore, the model also assumes that, preferences of individuals are of the

Essay on Microeconomics: ECOH 611

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