Engel curves and the unitary theory of the household

Abstract Previously unutilized household budget data are used to fit Engel curves to test Gary Becker's unitary theory of the household. If resources are fungible and are allocated to maximize a household utility function, the pattern of outlay should be invariant to control over and sources of income. The earnings of wives and Engel curves for food, rent, clothing, light and fuel, insurance and sundries are estimated using the two‐step method of Murphy and Topel. Although working wives contributed an average of 20% of household income, the coefficient of their earnings is not significant in every Engel curve estimated. It appears that Becker's altruist head of the household is the housewife/financial manager, at least in New York City in the early twentieth century.