Marital Stability With Committed Couples: A Revealed Preference Analysis

Abstract: We present a revealed preference characterization of marital stability where some couples are committed. A couple is committed if they can divorce only with mutual consent. We provide theoretical insights into the potential of the characterization for identifying intrahousehold consumption patterns. We demonstrate that without price variation for private goods among potential couples, intrahousehold resource allocations can only be identified for non-committed couples. We conduct simulations using Dutch household data to support our theoretical findings. Our results show that with price variation, the empirical implications of marital stability allow for the identification of household consumption allocations for both committed and non-committed couples.