[4][5] Since the beginning of the 20th century, most economists have focused on business and monetary dimensions of the economy without consideration of household behaviour.
[6] Economics theory applied to households, however, can help to understand interactions between the public and private sectors of society in ways that inform policies related to education, health, welfare and retirement.
Becker's work has taken place at a time when the American and more generally Western family has been undergoing profound changes since the Second World War.
His model helped to described resource allocation, utility maximization processes and decision making first in the United States and in other developed countries.
Becker attempts to resolve this problem of conflicts between household members thanks to his altruism model, also known as the Rotten kid theorem.
[7] The theorem asserts that one person, sometimes referred to as a benevolent dictator, controls the household's resources and has altruistic preferences, meaning they care about other family members.
As a result, the preferences of other family members enter the benevolent dictator's utility function as a normal good.
However, as explained by Ted Bergstrom's (1989) paper, the Rotten Kid theorem requires the assumption of the transferability of utility between household members.
[11][12][13] Studies conducted by Shelly Lundberg, Robert Pollak and Terence Wales (1997), Ward-Batts (2008) and Armand et al. (2020) found evidence that if government cash-transfers are given to either the mother or father, household expenditure patterns do in fact vary.
Becker also developed a general theory of family behavior for decisions concerning marriage, divorce, children and fertility.
The non-unitary household models developed from the 1990s onwards therefore set out to compensate for the weaknesses of the unitary approach.
[17][18][19] There are two approach of collective models: cooperative, where household decisions are Pareto efficient, and non-cooperative, based on Nash's equilibrium.
GARY S. BECKER (1981) "Treatise on the Family", Harvard University Press Nicolas Frémeaux "Essays on Family Economics" http://piketty.pse.ens.fr/files/Fremeaux2013These.pdf Pierré-Andre Chiappori, Monica Costa Dias and Costas Meghir (2015) "THE MARRIAGE MARKET, LABOR SUPPLY AND EDUCATION CHOICE", Working Paper 21004, NATIONAL BUREAU OF ECONOMIC RESEARCH https://www.nber.org/papers/w21004.pdf Pierre-Andre Chiappori, Lawrence Haddad, John Hoddinott, Ravi Kanbur "Unitary versus Collective Modelsof the Household: Time to Shift the Burden of Proof?"