Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: May, 1979, Volume 47, Issue 3

The Joint Allocation of Leisure and Goods Expenditure<539:TJAOLA>2.0.CO;2-T
p. 539-564

William A. Barnett

Conventionally labor supply modeling has been dichotomized from consumption expenditure allocation. We estimate a model unifying both aspects of the consumer's decision problem, and we test for the two-stage decision implied by the conventional dichotomy. We investigate the gains from joint modeling. We use a version of the Rotterdam model recently shown by Barnett [6] to be derivable at the aggregate level under weaker assumptions than those needed to acquire empirically usable theoretical results at the aggregate level with other models; our results are not subject to the restrictiveness imputed to earlier uses of versions of the Rotterdam model.

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