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Estimating household resource shares: A shrinkage approach
- Tommasi, Denni, Wolf, Alexander
- Economics letters 2018 v.163 pp. 75-78
- economics, models, poverty, shrinkage
- Collective models identifying resource shares are promising tools to analyze intra-household welfare and poverty. However, their empirical application has proven difficult in practice as authors contend with large standard errors and unstable estimates. This paper uses a prominent framework to show how a common feature of the structure of these models makes the task so difficult and proposes an empirical strategy to stabilize the estimates.