Common preference models of family behavior imply income pooling, a restriction on family demand functions such that only the sum of husband’s income and wife’s income affects the allocation of goods and time. Testing the pooling hypothesis is difficult because most family income sources are not exogenous to the allocations being analyzed. In this paper, we present an alternative test based on a “natural experiment"-a policy change in the United Kingdom that transferred a substantial child allowance to wives in the late 1970s. Using Family Expenditure Survey data, we find strong evidence that a shift toward greater expenditures on women’s clothing and children’s clothing relative to men’s clothing coincided with this income redistribution.

Shelly J. Lundberg is a professor of economics at the University of Washington; Robert A. Pollak is a professor of economics at Washington University in St. Louis; and Terence J. Wales is a professor of economics at the University of British Columbia. The authors acknowledge the research assistance of Debra Fogarty and Kelli Schonher and the comments of Jane Friesen, David Lam, Stephen Jenkins, an anonymous referee, and participants in workshops at Stanford University, the Institute for Research on Poverty at the University of Wisconsin—Madison and the University of Washington. The data used in this article can be obtained beginning in November 1997 through October 2000 from Shelly Lundberg at the Department of Economics, Box 353330, University of Washington, Seattle WA 98195.