Salcedo, Alejandrina; Schoellman, Todd; Tertilt, Michele - 2010
The size of the average American household has fallen dramatically -from six in 1850 to three in 2000. To explain this … decline we model households as collections of roommates who share the costs of household public goods. If private goods are … more income elastic than public goods, as we document in the paper, an increase in income endogenously leads to smaller …