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Effects of Structural Constraints and Costs on Choices

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  • Peter Simmons

Abstract

The paper argues that many choice situations involve a more complicated constraint structure than the standard linear budget constraint and consumption set. Some abstract examples are outlined and in each case some theoretical properties are derived, for example, of the comparative statics. One result of interest is to derive the direct utility choice problem, which generates quasihomothetic preferences. Some empirical examples for the generic cases are sketched for rural household choices, choices of costs of travel to work, a UK welfare benefit system.

Suggested Citation

  • Peter Simmons, 2010. "Effects of Structural Constraints and Costs on Choices," LABOUR, CEIS, vol. 24(s1), pages 25-45, December.
    • Handle: RePEc:bla:labour:v:24:y:2010:i:s1:p:25-45
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    File URL: http://hdl.handle.net/10.1111/j.1467-9914.2010.00503.x
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    References listed on IDEAS

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    1. Hausman, Jerry A, 1985. "The Econometrics of Nonlinear Budget Sets," Econometrica, Econometric Society, vol. 53(6), pages 1255-1282, November.
    2. Martin Browning & Pierre-André Chiappori & Valérie Lechene, 2006. "Collective and Unitary Models: A Clarification," Review of Economics of the Household, Springer, vol. 4(1), pages 5-14, March.
    3. Viola Angelini & Peter Simmons, "undated". "Housing Debt, Employment Risk and Consumption," Discussion Papers 05/07, Department of Economics, University of York.
    4. John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
    5. Richard Blundell & Mike Brewer & Peter Haan & Andrew Shephard, 2009. "Optimal Income Taxation of Lone Mothers: An Empirical Comparison of the UK and Germany," Economic Journal, Royal Economic Society, vol. 119(535), pages 101-121, February.
    6. Nadia Linciano & P Simmons, 2010. "Estimation of Alternative Models of Female Labour Supply with Fixed Travel Costs," Discussion Papers 10/10, Department of Economics, University of York.
    7. Maria Chiuri, 2000. "Quality and Demand of Child Care and Female Labour Supply in Italy," LABOUR, CEIS, vol. 14(1), pages 97-118, March.
    8. Chiuri, Maria Concetta & Jappelli, Tullio, 2003. "Financial market imperfections and home ownership: A comparative study," European Economic Review, Elsevier, vol. 47(5), pages 857-875, October.
    9. Gabriella Berloffa & Peter Simmons, 2003. "Unemployment Risk, Labour Force Participation and Savings," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(3), pages 521-539.
    10. Moffitt, Robert, 1990. "The Econometrics of Kinked Budget Constraints," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 119-139, Spring.
    11. Ariely, Dan & Loewenstein, George & Prelec, Drazen, 2006. "Tom Sawyer and the construction of value," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 1-10, May.
    12. Randon, Emanuela & Simmons, Peter, 2010. "Base consumption levels and fixed costs," Economics Letters, Elsevier, vol. 108(2), pages 222-224, August.
    13. Maria Concetta Chiuri & Giuseppe De Arcangelis & Angela Maria D’Uggento & Giovanni Ferri, 2007. "FEATURES AND EXPECTATIONS OF ILLEGAL IMMIGRANTS: results of a field survey in Italy," CHILD Working Papers wp01_07, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    14. Viola Angelini & Peter Simmons, "undated". "Housing Debt and Consumption," Discussion Papers 11/20, Department of Economics, University of York.
    15. P Simmons & F Zantomio, 2010. "Preferences and labor supply effects of benefits: the case of income-based Jobseeker’s Allowance," Discussion Papers 10/09, Department of Economics, University of York.
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