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Other models have challenged this "unitary" or "common preference" approach

and have attempted to incorporate divergent and conflicting preferences of individual family members into economic analysis. The allocation mechanism in these

individual utility models includes cooperative bargaining (Manser and Brown

1980; McElroy and Homey 1981; Lundberg and Pollak 1993), noncooperative

bargaining (Kanbur and Haddad 1994; Lundberg and Pollak 1994; Bergstrom

1996), and a generic "collective" approach which avoids specifying a particular

model of intrafamily allocation but assumes that family allocations obey a Paretoefficient sharing rule satisfying certain regularity conditions (Chiappori 1988,

1992).1

The common preference model implies pooling, a restriction on family demand

functions that is both simple and of considerable practical importance. If all

income is pooled and then allocated to maximize a single objective function, only

total family income will affect family demand. Which family member receives or

controls income is irrelevant to the allocation of family resources. Thus, the

pooling hypothesis implies the ineffectiveness of targeted transfer policies: transfer policies that attempt to redistribute income to particular family members will

be neutralized by the intrafamily allocation process-a form of Ricardian equivalence. In contrast, individual utility models of the household permit the income

received or controlled by one family member (for example, the wife) to have a

different effect on consumption and time allocation than income received by

another (for example, the husband). This is easy to see in cooperative Nash

bargaining models in which each spouse's income affects the threat point, and

thus the equilibrium allocation