marriage and class here we consider a matching model where agents are heterogeneous and utilities nontransferable we utilize this framework to study how equilibrium sorting takes place in marriage markets we impose conditions that guarantee the existence of a steady state equilibrium and then characterize it several examples are developed to illustrate the richness of equilibria the model reveals an interesting sorting externality that can support multiple steady state equilibria even with constant returns to matching excerpt

testing for rationality the case of discrete choice data abstract when working with micro data on consumer demand there are many different situations where decisions involve only discrete choices in this context conditions under which an underlying rational preference structure exists are derived moreover by introducing flexibility into the model it is possible to identify nonrational behavior in the sample

who marries whom and why this paper proposes and estimates a static transferable utility model of the marriage market the model generates a nonparametric marriage matching function with spillover effects it rationalizes the standard interpretation of marriage rate regressions and points out its limitations the model was used to estimate u s marital behavior in 1971 72 and 1981 82 the marriage matching function estimates show that the gains to marriage for young adults fell substantially over the decade unlike contradictory marriage rate regression results the marriage matching function estimates showed that the legalization of abortion had a significant quantitative impact on the fall in the gains to marriage for young men and women

a model of the demand for longevity and the value of life extension we specify a demand function for longevity or quantity of life along with corresponding demand functions for indicators of quality of life and a value of health and life extension function we show that the demand for health must be derived in conjunction with that for longevity and the related consumption plan and that all choices depend on initial individual endowments and terminal conditions our comparative dynamics predictions indicate that optimal health and longevity are increasing functions of endowed wealth rather than necessarily current income that improvements in opportunities to produce health can accentuate the differences between endowed health and attained longevity levels and that the value individuals ascribe to their health may be increasing over a good portion of their life cycle we use this model to analyze observed empirical variations in levels and trends of life expectancy and in exposure to health risks across different population groups

the meaning of death some simulations of a model of healthy and unhealthy consumption simulations of a model of healthy and unhealthy consumption are used to investigate the impact of various terminal conditions on life span pathways of health related consumption and health a model in which life span and the death stock of health are fixed is compared to versions in which i the death stock of health is freely chosen ii life span is freely chosen iii both the death stock of health and life span are freely chosen the choice of terminal conditions has a striking impact on optimal plans results are discussed with reference to the existing demand for health literature and illustrate the application of iterative processes to determine optimal life span the role played by the marginal value of health capital in determining optimal plans and the importance of checking the second order conditions for the optimal choice of life span

intergenerational persistence of earnings the role of early and college education recent empirical evidence from the united states indicates a high degree of persistence in earnings across generations designing effective public policies to increase social mobility requires identifying and measuring the major sources of persistence and inequality in earnings we provide a quantitative model of intergenerational human capital transmission that focuses on three sources innate ability early education and college education we find that approximately one half of the intergenerational correlation in earnings is accounted for by parental investment in education in particular early education we show that these results have important implications for education policy

comparative dynamic analysis of the full grossman model the paper applies the method of comparative dynamic analysis to the full grossman model for a particular class of solutions it derives the equations implicitly defining the complete trajectories of the endogenous variables relying on the concept of frisch decision functions the impact of any parametric change on an endogenous variable can be decomposed into a direct and an indirect effect the focus of the paper is on marginal changes in the rate of health capital depreciation it also analyses the impact of either initial financial wealth or the initial stock of health capital while the direction of most effects remains ambiguous in the full model the assumption of a zero consumption benefit of health is sufficient to obtain a definite for any direct or indirect effect

recreation demand models with taste differences over people we estimate random parameter logit models of anglers choice of fishing site the models generalize logit by allowing coefficients to vary randomly over anglers rather than being fixed the models do not exhibit the restrictive independence from irrelevant alternatives property of logit and can represent any substitution pattern estimation explicitly accounts for the fact that the variation in coefficients over anglers induces correlation in unobserved utility over trips by the same angler willingness to pay for improved fish stock and the value to anglers of specific sites are calculated from the models and compared with the estimates obtained from a standard logit model

if you tourist behave irrationally i ll find you abstract when departures from rational behavior can potentially be expected modeling should allow for their identification and their quantification in this regard prices in tourism might have effects that may not be as apparent as economic theory predicts this article incorporates the sticker shock formulation into the mixed logit model without imposing consistency with consumer theory to accommodate any possible positive or negative price effects by allowing the parameters of price and sticker shock term to take any value negative or positive we detect abnormal behaviors in the tourist demand not only is the negative relationship between price and demand inverted for some people but also some tourists might be willing to accept higher than expected prices the non well behaved groups shares are estimated

incentive effects of the u s welfare system a review the author would like to acknowledge support for prior work on this topic from the u s department of health and human services and helpful comments from three anonymous referees rebecca blank howard chernick john fitzgerald irwin garfinkel peter gottschalk edward gramlich david greenberg judith gueron james heckman v joseph hotz robert hutchens michael keane frank levy larry mead michael murray robert plotnick anuradha rangarajan philip robins howard rolston jeffrey smith and daniel weinberg all opinions and errors are those of the author alone

unobservable individual effects marriage and the earnings of young men i introduction married men earn more than unmarried men this fact is unassailable and is robust across data sets and over time two common explanations of the married male wage premium are i the division of labor in a married household which allocates more of the man s time to the market and ii lower cost human capital acquisition for married men both of these stories view marriage as productivity enhancing kenny 1983 provides some evidence that marriage facilitates human capital acquisition however the potential endogeneity of marital status is ignored furthermore the argument that marriage makes it cheaper to accumulate human capital is difficult to reconcile with the fact that individuals who acquire more formal education tend to marry later than those who acquire less bergstrom and schoeni 1992 an alternative explanation for the marriage premium is that marriage signals certain unobservable individual characteristics such as ability honesty loyalty dependability and determination that are valued in both the labor and marriage markets l although i and ii are quite different in terms of their behavioral content they do share a common thread whether marriage per se increases productivity or high productivity men are more likely to be married marital status should not be treated as an exogenous determinant of the wage rate nevertheless in most wage regressions that control for marital status it is assumed to be exogenous resulting in an estimated marriage premium that is biased upward two exceptions are nakosteen and zimmer 1987 and korenman and neumark 1991 although both papers base their empirics on samples of young men they come to very different conclusions regarding the size and source of the marriage premium nakosteen and zimmer find the marriage premium to be insignificantly different from zero and claim that marriage does not make men more productive korenman and neumark kn present evidence that the marriage premium is at least 15 and rises with years married indicating that marriage may be productivity enhancing in this paper we reexamine the empirical relationship between marriage and wages using a sample drawn from the 1971 1976 1978 and 1980 waves of the national longitudinal survey of young men nlsym our data set is an extension of the one used by kn whose empirical work is based on the 1976 1978 and 1980 waves of the nlsym 2 our results may be summarized as follows estimates of the marriage premium derived from fixed effects models which control for unobserved heterogeneity are uniformly smaller than those obtained from random effects models and other cross section approaches that do not specification tests reject the latter and suggest that the individual effects are positively correlated with both marriage and wages conditional on labor market experience job tenure and year effects time spent in marriage has no significant effect on wages this stands as evidence against any dynamic productivity enhancing effect of marriage we conclude that whatever the source the marriage premium is a pure intercept shift and no more than 5 to 7 further support for this conclusion comes from the relationship between prospective marriage and wages using our longer panel we construct a to be married variable which identifies men who marry sometime during the sample period men who are not married in 1971 but who will be earn at least as much as those who are already married finally an interesting related result is the robust and significant effect of children on wages conditional on marital status and years married the presence of children raises wages about 5 regardless of the estimator employed we interpret the effects of marriage and children on wages similarly as structural breaks in the wage generating process involving adjustments in market work and homework among other things

activities in models of recreational demand scholars have taken divergent approaches to incorporating on site activities into their empirical specifications of site choice models we provide a framework for assessing this methodological heterogeneity through a model that explicitly allows individuals to choose both on site activities and site attributes this model not only conditions the marginal value of site attributes on the choice of an activity but also explicitly recovers the marginal rates of substitution across activities this eliminates previously unrecognized biases in the welfare analysis of changes in site attributes we test hypotheses generated by our model by comparing rival models of demand for access to beaches in costa rica

on the state of the union an overlapping generations model of marriage and divorce is constructed to analyze family structure and intergenerational mobility agents differ by sex marital status and human capital single agents meet in a marriage market and decide whether to accept or reject proposals to wed married couples must decide whether to separate or not parents invest in their children depending on their wherewithal a simulated version of the theoretical prototype can generate an equilibrium with a significant number of female headed families and a high degree of persistence in income across generations to illustrate the model s mechanics the effects of two antipoverty policies namely child support and welfare are investigated

an empirical model of labor supply in a life cycle setting this paper formulates and estimates a structural intertemporal model of labor supply using theoretical characterizations derived from an economic model of lifetime behavior a two step empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provide the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path

matching finding a partner for life or otherwise how do job worker and husband wife relationships form and why do some matched pairs subsequently separate economists and game theorists are in the process of developing and applying an equilibrium explanation of match formation and separation based on the principle of voluntary pairing under competitive conditions the purpose of this paper is to assess the current state of these developments the general existence of patnership structures with the property that no one has an incentive to separate has been established these equilibrium structures maximize aggregate value over the set of all feasible match structures in the transferable utility case according to this pure theory of matching competition for partners can be expected to yield equilibrium match structures that are both stable and socially efficient at least under conditions of frictionless certainty search theoretic models that take account of meeting costs and initial uncertainty about match values have been developed to explain sepa

identifying non consistent choice behavior in recreation demand models in a rpl model rather than imposing consistency with consumer theory by constraining the distribution of the price coefficient to have negative support a more general procedure is developed non consistent choice behavior is identified in a recreation demand model for game reserves in south africa

on adaptation and the demand for health the purpose of this paper is to analyse the impacts of adaptation to failing health this is done by integrating adaptation processes in a grossman type of pure consumption model model simulations show that adaptation affects the health variables by lowering the incentives to invest in health as well as smoothing the optimal health stock path over the life cycle whether or not the risk of mortality is an object of choice has important effects when studying adaptation as well as for the joint development of the health variables

health status and health dynamics in an empirical model of expected longevity expected longevity is an important factor influencing older individuals decisions such as consumption savings purchase of life insurance and annuities claiming of social security benefits and labor supply it has also been shown to be a good predictor of actual longevity which in turn is highly correlated with health status a relatively new literature on health investments under uncertainty which builds upon the seminal work by grossman grossman m 1972 on the concept of health capital and demand for health journal of political economy 80 223 255 has directly linked longevity with characteristics behaviors and decisions by utility maximizing agents our empirical model can be understood within that theoretical framework as estimating a production function of longevity using longitudinal data from the health and retirement study we directly incorporate health dynamics in explaining the variation in expected longevities and compare two alternative measures of health dynamics the self reported health change and the computed health change based on self reports of health status in 38 of the reports in our sample computed health changes are inconsistent with the direct report on health changes over time and another 15 of the sample can suffer from information losses if computed changes are used to assess changes in actual health these potentially serious problems raise doubts regarding the use and interpretation of the computed health changes and even the lagged measures of self reported health as controls for health dynamics in a variety of empirical settings our empirical results controlling for both subjective and objective measures of health status and unobserved heterogeneity in reporting suggest that self reported health changes are a preferred measure of health dynamics