labor supply in the presence of taxes an alternative specification this paper estimates a model of married women s labor supply in the presence of progressive taxes the specification is based on a translog indirect utility function with normally distributed random preference parameters the application of roy s identity then leads to a distribution of labor supply that involves ratios of normals

educational expenditure in urban china income effects family characteristics and the demand for domestic and overseas education analysing survey data from 32 selected cities across china in 2003 this article examines parents expenditure on their children s education from two aspects factors affecting domestic education expenditure and factors affecting expenditure on overseas education the main findings that emerge from this study are as follows first household income has significant effects on the magnitude of the domestic and overseas educational expenditures second households where mothers have senior secondary school or college education and fathers are working in professional occupations are likely to spend more on education for their children third being in the highest income category having a college educated father having a mother who is a cadre or middle professional and living in a coastal area significantly enhances the probabilities for the households sending their children overseas for education

household labor supply and welfare participation in sweden using a sample of swedish households we estimate a household labor supply model assuming that preferences for consumption and leisure can be described by a direct translog utility function the labor supply and welfare participation decisions are treated as a discrete choice problem and we assume that these choices follow a simple conditional logit rule in addition we allow unobserved individual specific effects to be correlated across alternatives we assume that these unobserved effects are drawn from a discrete distribution and the correlation across alternatives is modeled using factor loading techniques classification error in hours is allowed for by using a multiplicative measurement error specification the estimates from the structural model yield inelastic labor supply among husbands and positive wage elasticity for wives further the cross elasticities are close to zero

wealth and portfolio composition theory and evidence we examine a survey of 6010 u s households and estimate a model for household portfolio allocation we extend the conventional portfolio choice model in order to capture the observed incompleteness of household portfolios we show that the empirical specification of the joint discrete and continuous choice that characterizes household portfolio behavior is a switching regressions model with endogenous switching we go on to examine the impact of taxes on portfolio composition using detailed survey data to calculate precisely the marginal tax rate facing each household finally we estimate wealth elasticities of demand for a range of assets and liabilities

independence of irrelevant alternatives and revealed group preferences it is shown that a pareto optimal and continuous single valued choice function defined on the compact convex subsets of the positive orthant of the n dimensional euclidean space maximizes a real valued function if and only if it satisfies the independence of irrelevant alternatives condition if n 2 and the strong axiom of revealed preference otherwise the results can be applied to consumer demand theory to deal with nonlinear budget sets and to bargaining game theory to generalize the nash bargaining solution

microeconometric analysis of residential water demand this paper develops a structural model for obtaining price elasticities and evaluating consumer s response to changes in nonlinear tariffs when only panel data on household consumption are available the model and the empirical strategy address problems implied by nonlinear tariffs existence of a fixed cost and use of limited data giving rise to a random effects model with a nonlinear individual effect results show that the estimated model does well at fitting data and demand is inelastic although elasticity varies by initial consumption block then i estimate welfare consequences of implementing several demand policies

the effect of income taxation on the labor supply of married men in sweden abstract this paper presents labor supply functions estimated on a sample of prime age swedish males the model used takes account of the nonlinear character of individuals budget sets caused by the progressive income tax it also allows preferences to vary between individuals calculations with the estimated functions using a partial equilibrium framework indicate a sizeable effect of the income tax on hours of work the average expected deadweight loss of the income tax is found to be approximately 20 percent of tax revenue

the ces utility function non linear budget constraints and labour supply results on female participation and hours the most recent efforts in the study of labour supply decisions have concentrated on the estimation of explicit utility indices as a means to overcome the specification and endogeneity problems created by non linear budget constraints the presence of non convexities and the interest in making welfare comparisons between individuals are additional reasons that make the use of explicit utility functions in either direct or indirect form an essential requirement for labour supply studies it is therefore important to consider carefully the available possibilities from a utility index we want flexibility and ease of estimation the stonegeary function has proved its relative worth in consumption studies but its performance has been disappointing when leisure is incorporated into the set of commodities abbot and ashenfelter i976 found that for part of their sample estimated available time was less than hours worked and these results have pervasively reappeared in subsequent studies using this function hausman i980 has recently proposed a utility function which yields a linear hours function this is an important contribution which facilitates the task of estimation enormously this paper argues that the ces utility function despite not generating a linear hours function is also very convenient for estimation purposes in fact it is shown below that to estimate the parameters of the utility function there is no need whatsoever for any explicit hours function labour supply responses by married women have been previously estimated with british data but none of the available results has taken full account of the joint decision on participation and hours and of the non linear shape of the budget constraint that the tax system generates layard et al i980 consider the joint decision in their estimation procedure but ignore the tax system greenhalgh i980 takes into account the non linearity of the budget constraint but estimates labour supply responses by a method which treats participation and hours of work as separate and independent decisions in the present paper on the other hand using an explicit utility index we propose an estimation method which takes into account both the tax system and the joint hours participation decision

price knowledge in household demand for utility services a household s decision to acquire price knowledge is endogenous in the demand for utility services and may affect elasticities and consumption levels a simultaneous equation model with endogenous switching is developed to evaluate the effects of price knowledge and other sources of heterogeneity results indicate informed households were more responsive to average and marginal price signals informed households also use less water but this is due to heterogeneity rather than price knowledge controlling for heterogeneity price knowledge actually increases monthly water usage the implications of accounting for differences in price knowledge in utility demand modeling and demand management policy are discussed

how welfare policies affect child and adolescent achievement recent research based on random assignment experiments has found that the effects of welfare and employment policies appear to vary by children s developmental stage programs that increase parents employment and income have been found to have either neutral or positive effects for preschool and early school age children in poverty depending on the policy approach utilized pamela morris et al 2001 at the same time negative effects have been observed for adolescent children lisa gennetian et al 2002 and the limited research on very young children has shown neutral effects morris and charles michalopoulos 2000 we pool data on over 30 000 achievement reports for children in families enrolled in 14 different random assignment welfare and work programs to examine how the impacts of policies aimed at increasing parents employment and their income vary across childhood our efforts extend past work by including more programs using longer run follow up data from some of the programs that had been included in prior studies and pooling micro level data rather than applying meta analytic techniques to study wide impact estimates both economic and psychological theories suggest that changes in parents economic and employment circumstances may affect children s development although each emphasizes a different pathway of influence gary s becker 1981 james s coleman 1988 vonnie mcloyd 1998 but children in differing developmental periods may respond differently to the same changes in employment on the part of their parents for example employment in the first year of a child s life may be associated with more negative child outcomes jeanne brooksgunn et al 2002 especially if it involves many hours of work elizabeth harvey 1999 or is associated with long hours in nonmaternal care michael lamb 1998 mcloyd 1998 after school arrangements are associated with positive outcomes for both pre adolescent and adolescent children keeping them in structured care and away from peers gregory s pettit et al 1999 jill k posner and deborah lowe vandell 1999 at the same time adolescents may have difficulties if left alone after school and into the evening hours as mothers take on off hour and shift work maternal employment has been found to be associated with reduced parental supervision and increased adolescent delinquency among low income families robert j sampson and john h laub 1994 finally adolescent children may also be asked to take on greater household responsibilities when their single mothers move into employment which may result in negative academic performance since some of the welfare programs in our pooled data provided financial incentives and boosted not only employment but also family income we are able to ascertain whether income augmenting programs benefit children more than programs that merely increase employment note however that none of our studies randomly allocated participants into either a financial incentive or a nonfinancial incentive program so our comparison of impacts between these two types of programs is nonexperimental experimental research to date suggests that programs that increase both parents employment and their income produce positive effects for preschool and early school age children clark kaufman and duncan institute for policy research northwestern university evanston il 60208 e mail beth clark northwestern edu greg duncan northwestern edu morris manpower demonstration research corporation 16 east 34th street new york ny 10016 email pamela morris mdrc org we are grateful for financial support from the family and child well being research network of the national institute of child health and human development u01 hd30947 06 for supporting duncan and clark kaufman this paper is part of next generation a project led by the manpower demonstration research corporation mdrc that examines the effects of welfare antipoverty and employment policies on children and families funding for this project was provided by the david and lucile packard foundation the william t grant foundation and the john d and catherine t macarthur foundation we thank the funders of these studies and partners in evaluating these programs for access to the data

constant increasing and decreasing risk aversion with many commodities the arrow 1971 pratt 1964 theory of risk aversion has achieved important successes in the study of economic responses to risk this theory applies to a special class of cases in which the von neumann morgenstern expected utility hypothesis is used to explain these responses under this hypothesis individuals who maximize the expected utility of different utility functions will in general make different choices in the face of uncertainty for the purpose of predicting which of two different utility functions will lead to locally more risk averse economic behaviour the essential feature of these functions is their associated arrow pratt absolute risk aversion measures in fact the local comparisons can be extended to global comparisons if the arrow pratt absolute measures are uniformly comparable the arrow pratt measure of absolute risk aversion and a closely related measure of relative risk aversion also play crucial roles in the investigation of changes induced by wealth increases in the risk taking behaviour of a single expected utility maximizing individual this study has resulted in a satisfactory theory of increasing decreasing and constant absolute and relative risk aversion the special cases to which the arrow pratt theory is directly applicable are those in which the utility functions in question are functions of a single variable e g wealth unfortunately the models required to explain many economic decisions employ a version of the expected utility hypothesis in which the argument of the utility function is a multidimensional vector one example arises in the study of the consumption savings decision another occurs in the analysis of the combined consumption savings portfolio decision a final example is obtained in the investigation of demand for goods of uncertain quality the papers of kihlstrom mirman 1974 and diamond stiglitz 1974 have suggested a partial generalization of the arrow pratt theory of absolute risk aversion this

parental investment in children s human capital in urban china the present study tests the extent of parental forgone consumption used instead to invest in children s human capital by use of intrahousehold resource allocation models using an unusual comprehensive data set for urban china there is more spending on boys aged 13 to 15 but more on girls aged 16 to 18 suggesting that standard human capital theories and traditional perceptions of gender bias do not completely explain educational expenditure decisions the evidence from urban china is consistent though with human capital models which consider parental intertemporal preferences also the findings suggest that the perceived bias in favour of sons exists weakly in contemporary urban china

family labor supply with taxes over the period 1960 1983 the proportion of federal tax revenue raised by taxation of labor supply has risen from 57 77 percent in this paper we specify and estimate a model of family labor supply which treats both federal and state taxation husbands and wives labor supply are treated jointly rather than in aseparate manner as in previous research a method to calculate the virtual wage for nonworking spouses is used within a utility maximizing framework to treat correctly the joint family labor supply decision joint family efforts are found to be important the efficiency cost deadweight loss of labor taxation is estimated to be 29 6 of tax revenue raised the effect of the new 10 deduction to ease the marriage tax for working spouses leads to a prediction of 3 8 increase in wives labor supply and a 9 decrease in husbands labor supply overall taxes paid are predicted to decrease by 3 4 this abstract was borrowed from another version of this item

the econometrics of piecewise linear budget constraints a survey and exposition of the maximum likelihood method in this article maximum likelihood techniques for estimating consumer demand functions when budget constraints are piecewise linear are exposited and surveyed consumer demand functions are formally derived under such constraints and it is shown that the functions are themselves nonlinear as a result the econometric problems in estimating such functions are exposited and the importance of the stochastic specification is stressed in particular the specification of both unobserved heterogeneity of preferences and measurement error econometric issues in estimation and testing are discussed and the results of the studies that have been conducted to date are surveyed

female labor supply with a discontinuous nonconvex budget constraint incorporation of a part time full time wage differential this paper incorporates the well documented part time full time wage differential into an empirical labor supply model with both a heterogeneity and a random error term and estimates that model fo

tax reform and housing demand the distribution of welfare gains and losses abstract we study distributional effects of a recent reform of the swedish system of income taxation which affects the price of owner occupied housing in calculating the welfare effects we account both for the non linearities of the income tax schedule and the dichotomous choice aspect of housing demand to own or to rent small and rosen 1981 have shown how the standard harberger type approximation formulae can be adapted to handle discrete choices and we modify their analysis for a non linear budget constraint

the econometrics of nonlinear budget sets traditional empirical analysis of consumer demand has usually made the assumption of linear budget sets that is the consumer is assumed to purchase any desired quantity at a constant price subject to a budget constraint the major exception to this framework is the analysis of demand when some goods are rationed 2 in the rationed case the price is constant up to a quantity limit in contrast to the rationed case here i consider the situation where the price varies with the amount of the good purchased empirical situations with nonconstant prices come readily to mind and of course they have received much recent attention from theorists since mirrlees 44 paper on optimal nonlinear taxation the following examples are meant to give a partial listing of cases when nonlinear budget sets occur i electricity prices many electric utilities engage in declining block pricing that is the marginal price of successive kwh s of electricity decrease at a given number of points determined by total demand thus the budget set is piecewise linear houthakker 36 was the first to propose an approach to this problem taylor 51 analyzes the problem at length and hausman kinnucin and mcfadden 31 use an instrumental variables estimator to provide consistent estimates of the demand function

income effects and physician labour supply evidence from the threshold system in ontario we examine a reform to the physician threshold system in ontario that provides a unique opportunity to assess the effect of fee changes on physician behaviour free from the biases that potentially affect simple time series or cross section inference we find that 1 the income effects of fee changes are small but significant 2 the income effect dominates the substitution effect only for a minority of services with relatively low prices and high volumes and 3 the cross effects of fee changes tend to be significant only for services with relatively high prices and low volumes une reforme du systeme des seuils de revenus au dela desquels les medecins sont penalises a fourni une occasion en or de mesurer l effet des changements de revenus sur le comportement du medecin en evitant les biais qui potentiellement vicient les resultats derives des series chronologiques ou des analyses transversales on decouvre que 1 les effets de revenus des changements de remuneration sont faibles mais significatifs 2 l effet de revenu domine l effet de substitution seulement pour un petit nombre de services a faible prix et fort volume et 3 les effets croises des changements de remuneration tendent aetre significatifs seulement pour les services dont le prix est relativement eleve et ou il y a faible volume

determinants of voluntary overtime decisions determinants of voluntary overtime decisions i introduction since the passage of the fair labor standards act in 1938 the minimum legal overtime pay premium has remained time and one half for persons working more than forty hours per week in 1978 approximately 59 percent of the labor force was subject to this provision and coverage has not changed since then 1 the labor market effects of overtime provisions including the decision on the part of both employers and employees to utilize overtime has generated a great deal of intellectual debate for example union groups have long stressed the importance of raising the legal minimum premium in order to stimulat employment through a substitution of additional employees for longer e g overtime hours previous research by ehrenberg and schumann 1982 has estimated that these effects are likely to be quite small to date studies of overtime behavior such as ehrenberg 1971a have focused on the decisions of employers implicit in these studies is the assumption of a perfectly elastic supply response by the employee to employer overtime policy however just as employers attempt to minimize costs in demanding overtime hours taking into account quasi fixed labor costs in addition to overtime premiums employees attempt to maximize utility in supplying overtime hours from the worker s perspective the decision to work overtime and perhaps more generally to take a job where overtime is regularly available or required can be thought of as resulting from a comparison of the utility derived from an overtime versus a no overtime state within this framework the voluntary overtime decision depends on relative wages overtime to straight time and nonlabor income and will be strongly conditioned on such personal factors as the worker s marital status and age this study attempts to advance our knowledge of the labor market effects of overtime policies by explicitly modelling employee responses to variations in the legal parameters of the overtime system 2 our model allows us to estimate substitution and income elasticities for overtime and thereby enables us to evaluate the effects of a variety of policies on a worker s voluntary overtime decision policy simulations suggest that legislative changes to increase the overtime premium or reduce the number of hours after which the mandatory premium takes effect would induce greater voluntary overtime on the part of worker yet because of offsetting income and substitution effects the net induced effects of such policies are not quantitatively large we also find that mandatory overtime provisions are most likely to be found in settings where quasi fixed employment costs are highest the remainder of this paper is organized as follows section ii develops a theoretical model of the voluntary overtime decision section iii presents the empirical model to be estimated section iv discusses the data used in estimation and the construction of key variables section v presents the empirical findings section vi reports the results of a simulation analysis of the effects of a number of policy alternatives on the voluntary overtime decision section vii investigates the sensitivity of the policy simulations to the empirical specification finally section viii summarizes the major conclusions and gives suggestions for further research ii the voluntary overtime decision the voluntary overtime decision can be though of as resulting from a straightforward maximization of utility subject to a budget constraint consider a worker who possesses a monotonic strictly quasi concave utility function in market goods income and labor supply u y h where y is income and h is hours of work the budget constraint facing the worker is y wh n where w is the net of taxes wage rate and n is net nonwage income to make the problem empirically tractable we utilize the stone geary utility function in this paper

the causes of childhood obesity a survey childhood obesity rates are rapidly rising in many countries since it is highly likely that obesity will persist into adulthood current rates undermine the health and future of people in developed as well as developing countries this public health epidemic carries significant economic social as well as individual level consequences and has become a research topic of significant interest for various disciplines including economics we survey the literature in economics and related disciplines associated with the causes of childhood obesity and synthesize the results to provide a better understanding of the explanations for the rising childhood obesity rates this is an important step in crafting effective policies to combat global childhood obesity trends

family decision making for educational expenditure new evidence from survey data for nigeria this study examines the determinants of educational expenditures by households in nigeria data from the nigerian general household survey panel 2012 2013 wave 2 was used and a double hurdle mode

an exogeneity test for a simultaneous equation tobit model with an application to labor supply a test of weak exogeneity in the simultaneous equation tobit model is proposed and illustrated using a female labour supply model estimated using cross section data the test statistic can be simply output from any standard tobit maximum likelihood package and is asymptotically efficient the procedure provides consistent estimators for the simultaneous tobit model whose asymptotic covariance matrix is a simple extension of the usual tobit formula we also provide the lagrange multiplier test of weak exogeneity this abstract was borrowed from another version of this item

testing the behavior of rationally inattentive consumers in a residential water market abstract rationally inattentive consumers tend to apply simplified heuristics when making decisions we test the hypothesis of rational inattention in the context of residential water usage where water bills typically account for a small fraction of household expenditures and only attract casual attention we begin by rigorously testing whether or not residential water customers exhibit evidence of rational inattention we then propose a heuristic water demand model to explore the decision making of rationally inattentive consumers and validate the model by comparing the model with the discrete continuous choice model on attentive and fully informed decision makers in out of sample predictions