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Consumer Demand and the Role of Labour Supply and Durables

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  • Iftikhar Hussain

Abstract

In this article I test empirically whether intratemporal preferences between (1) nondurables and labour supply and (2) nondurables and housing are separable. In doing so, careful attention is paid to the potential endogeneity of the total budget, labour supply and housing. For housing I offer two separate solutions to the problem of correlation between house size, proxied by number of rooms, and unobserved heterogeneity: first, instrument with a children's sex composition dummy and second, select on households residing in public housing. The results strongly reject separability between nondurables and labour supply. For nondurables and housing the results are more mixed. Copyright 2006 Royal Economic Society.

Suggested Citation

  • Iftikhar Hussain, 2006. "Consumer Demand and the Role of Labour Supply and Durables," Economic Journal, Royal Economic Society, vol. 116(510), pages 110-129, March.
  • Handle: RePEc:ecj:econjl:v:116:y:2006:i:510:p:c110-c129
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    Cited by:

    1. Daniel Aaronson & Eric French, 2007. "Product Market Evidence on the Employment Effects of the Minimum Wage," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 167-200.
    2. Laura Blow & Valérie Lechene & Peter Levell, 2014. "Using the CE to Model Household Demand," NBER Chapters,in: Improving the Measurement of Consumer Expenditures, pages 141-178 National Bureau of Economic Research, Inc.
    3. Attanasio, Orazio & Di Maro, Vincenzo & Lechene, Valérie & Phillips, David, 2013. "Welfare consequences of food prices increases: Evidence from rural Mexico," Journal of Development Economics, Elsevier, vol. 104(C), pages 136-151.
    4. John Ermisch & Chiara Pronzato, 2008. "Intra-Household Allocation of Resources: Inferences from Non-resident Fathers' Child Support Payments," Economic Journal, Royal Economic Society, vol. 118(527), pages 347-362, March.

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