Volume 29, Number 3 (Summer) 1994
Del Boca, Daniela, and Christopher J. Flinn. 1994. "Expenditure Decisions of Divorced Mothers and Income Composition." Journal of Human Resources 29(3):742-762.
In this paper we analyze the relationship between the income sources of custodial divorced parents and their expenditure patterns. We use data from the Consumer Expenditure Survey to directly investigate the issue of whether or not divorced mothers receiving child support income spend larger amounts on "child goods" than those not receiving child support holding total household income constant. By comparing the estimated coefficients on child support income and other income in an "endogenous" Engel curve specification we argue that we can classify child goods as being public or private and say something about the expenditure patterns on noncustodial fathers under a Nash equilibrium model of parental expenditures on public child goods and some plausible assumptions regarding the manner in which child support transfer decisions are made by noncustodial fathers. Our empirical results indicate that income composition does affect the expenditure patterns of divorced mothers and that consumption externalities exist even among divorced parents.
Daniela Del Boca is a professor of economics at the University of Turin. Christopher J. Flinn is a professor of economics at New York University. Research support for this paper has been provided by National Institute for Child Health and Human Development grant HD28409 and by a grant from the C. V. Starr Center for Applied Economics at New York University. The authors have also benfitted from technical assistance and financial support provided by ICER (Torino). They are grateful to Alberto Martini and an anonymous referee for providing a number of useful suggestions which resulted in a great improvement in the exposition. Antonio Merlo provided excellent research assistance and suggestions. The authors claim responsibility for all errors and omissions. The data used in this article can be obtained beginning February 1995 through February 1998 from Professor Christopher Flinn, Department of Economics, New York University, 269 Mercer Street, New York, N. Y. 10003.
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