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EXAM 2023/24
COURSEWORK ASSESSMENT COVER SHEET
ECON0115: TOPICS IN HOUSEHOLD ECONOMICS
ASSESSMENT COMPONENT: 80% Open-book coursework assessment
ASSESSMENT RELEASE: Friday December 15th 2023 14:00 (London time)
SUBMISSION DEADLINE: Monday January 8th 2024 14:00 (London time)
SUBMISSION INSTRUCTIONS
1. Submission
(a) All work must be uploaded via Moodle Assignment using the link provided in the module
Moodle page by the submission deadline and following the Module Leader’s instructions.
2. SoRAs and Extenuating Circumstances
(a) Students with a SoRA, i.e. Reasonable Adjustments arrangements, should submit their
work within the time permitted by these arrangements.
(b) If you have extenuating circumstances that affect your ability to submit your work within
the submission deadline, you should submit an Extenuating Circumstances claim. If you
need assistance completing the claim, you should contact your home department.
3. Submission Format and Timing
(a) The file containing your work should be a PDF file. Your work should be typed, with any
handwritten/typed diagrams, graphs or algebra scanned in and added to the relevant point
in the text, then saved-as-pdf.
(b) Allow sufficient time for submitting your work and once your submission has been accepted
by TurnitIn/Moodle, take and save a screenshot. If you experience issues with uploading
your work go to Help & Support — Information Services Division – UCL –{} University
College London.
(c) If the issue cannot be resolved by contacting ISD, contact the Module Administrator and
not the Module Leader.
4. Word-limits for this Assessment:
(a) The word-limit for this assessment is indicated in each question.
(b) UCL word-limit penalties are specified here: Section 3: Module Assessment — Academic
Manual – UCL –{} University College London.
ECON0115 1 TURN OVER
5. No Significant Attempt: You will be awarded a mark of 0% in this assessment when you:
(1) do not attempt the assessment or, (2) attempt so little of the assessment that it cannot
be assessed. Please refer to Section 3: Module Assessment — Academic Manual – UCL –{}
University College London on the consequences of not making a significant attempt.
6. Late Submissions
(a) Markers mark the assessment based on academic merit. If necessary, late submission penalties will be applied administratively after marking.
(b) The assessment submission link will allow work to be submitted up to 4 weeks late. This
arrangement is in place for students with permitted extensions due to SoRAs or Extenuating
Circumstances.
(c) Late Submission Penalties will be applied according to Section 3: Module Assessment —
Academic Manual – UCL –{} University College London.
7. Academic Misconduct
(a) All students should be familiar with UCL’s assessment regulations on misconduct: Section
9: Student Academic Misconduct Procedure — Academic Manual – UCL –{} University
College London
(b) Examination offences include (but are not limited to) (self-)plagiarism, unauthorised collaboration, falsification, contract cheating, and falsification of extenuating circumstances.
You should be familiar with: Academic Integrity — Students – UCL –{} University College
London.
8. Assessment Queries: If you suspect that there is an error or ambiguity in one or more questions
of your assessment that cannot be clarified using the information you can access on Moodle:
(a) Do not communicate with the Module Leader or any student.
(b) Make a reasonable assumption about what the question means and continue to complete
and submit your assessment.
(c) Use the Coursework Query Form available on the module Moodle page to convey your
query and, if relevant, any assumptions that you have made to enable you to complete
the question(s). Include the completed Coursework Query Form as the first page of your
submission.
ECON0115 2 CONTINUED
Answer all questions from Part A, all questions from Part B and 1 question from Part
C.
Part A carries 20% of the total mark, Part B carries 35% of the total mark and Part
C carries 45% per cent of the total mark.
In cases where a student answers more questions than requested by the examination rubric, the policy
of the Economics Department is that the student’s first set of answers up to the required number will
be the ones that count (not the best answers). All remaining answers will be ignored.
By submitting this assessment, you are confirming that you have not violated UCL’s Assessment
Regulations relating to Academic Misconduct contained in Section 9 of Chapter 6 of the Academic
Manual.
PART A
Answer all questions from this section. For each question, state whether the statement is true or false
and explain your reasoning, within a maximum of 100 words per question.
EXAMPLE:
Education is a distribution factor.
– False
– An individual’s ordering of consumption baskets may depend on their level of education, in
which case education is a preference shifter. However, there is no reason why an individual’s
ordering of consumption baskets would depend upon their level of education relative to that
of their partner. If relative education is found to affect choices, it is possible to conclude
that it is a distribution factor. (65 words)
A1 Education, number of children or region of residence can be considered either as characteristics
of an individual or as choices depending on the phenomenon being studied.
A2 It is possible to test for income pooling without a structural model of choice of individuals or
households.
A3 A good like smoking cannot be represented as a household public good, with one individual
deriving utility from smoking and another individual experiencing disutility from the smoking
of the first individual.
A4 Calvi’s argument to explain excess mortality of women could be tested on a sample of women
regardless of age, but with information on fertility status.
A5 We see empirically that people tend to marry people who have very different levels of education
to them. Economists explain this by reference to risk sharing.
ECON0115 3 TURN OVER
PART B
Answer all questions from this section.
B 1 Maximum 350 words. In Mexico, the budget share of food increases after large cash transfers to
poor households. Explain how this has been interpreted.
B 2 Maximum 350 words. You have estimated a demand system following an approximation to an
Almost Ideal Demand System:
wij = β0+β1motherij +δ ln _x0012_ xij
a(p)
_x0013_
+η ln xij
a(p)

motherij +
N
X
n=1
γijn ln pnj +Vj
0 β2+Xi
0β3+εij
where w
n
ij is the budget share of a good for household i in village j, xij is total expenditure,
motherij is an indicator taking the value 1 if the recipient of a cash transfer is the mother in
a household and the value zero if it is the father, Vj is a vector of village characteristics and
Xi
is a vector of household characteristics. The table below gives some of the results from the
estimation, where the budget share of the good has been multiplied by 100. Standard errors in
parenthesis. Chose all the correct statements below and explain why they are correct.
Engel curve
Dep.variable: Budget share of the good
Mother municipality -1.69 -1.69
(0.86) (0.85)
Mother municipality * expenditure 3.21
(1.25)
Expenditure 5.34 3.32
(1.99) (2.39)
(a) A 10% increase in total expenditure is associated with an increase of about 5.34 percentage
points in expenditure on this good on average.
(b) The marginal effect of total expenditure is lower on average in mother municipality than
in father municipality.
(c) The good is a luxury and a 50% increase in total expenditure is associated with an increase
between 2 and 3 percentage points in the budget share of this good.
(d) The coefficient on the indicator for mother receiving the transfer is negative, indicating
that the good is not a luxury for mothers.
ECON0115 4 CONTINUED
(e) If mothers receive the transfer, it shifts the intercept of the Engel curve down by 1.69
percentage points and the slope is significantly different depending upon whether mothers
or fathers receive the transfer.
(f) If mothers receive the transfer, it shifts the intercept of the Engel curve down by 1.69% and
the slope is not significantly different depending upon whether mothers or fathers receive
the transfer.
ECON0115 5 TURN OVER
PART C
Answer one question from this section. Maximum 1000 words.
C 1 Suppose domestic production can be represented by the function below:
z = f(q, t) = q
α
t
β
where q is the quantity of market good and t is the quantity of time used to produce domestic
good z. Time can be used to work on the market or to produce the domestic good. The
parameters α and β are strictly positive and q ≥ 0, t ≥ 0. Suppose utility is given by U = z and
denote by x total expenditure on the market good and time for domestic production.
(a) Discuss and illustrate with concrete examples the nature of returns to scale in domestic
production.
(b) Derive the expression of the demand for inputs as a function of α and β.
(c) Suppose the household is composed of two individuals, a and b, whose time inputs into
domestic production sum to total time input t = t
a + t
b
. Derive the first order conditions.
(d) Suppose w
a = w
b
. What can you say about t
a and t
b

(e) Suppose w
a > wb
. Explain whether and why the household will choose a solution where
t
a > 0.
(f) Suppose w
b > wa and t
b = 0. Solve for q and t
a
. Derive the budget shares of the market
good of non market time and comment.
(g) Discuss how the development of marketable substitutes for the activities traditionally undertaken by households affects the potential gains to marriage.
C 2 Present and evaluate the literature on income pooling you have learned about in this course.
ECON0115 6 END OF PAPER