Intertemporal Behavior and Household Structure∗

In this paper the traditional household Euler equations are estimated for singles and separately for couples. Using the Consumer Expenditure Survey, I reject the Euler equations of couples, but I cannot reject the Euler equations of singles. This result is rationalized using an intertemporal model with no intra-household commitment. Using this model it can be shown that an excess sensitivity test should generally reject the household Euler equations of couples, but not of singles. A test is then derived to evaluate the explanation given in this paper against alternative hypotheses using a proportionality condition which is specific to the intertemporal model considered here. I cannot reject the explanation provided in this paper.