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Econometric Approaches to the Specification of Life-Cycle Labour Supply and Commodity Demand Behaviour

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  • Blundell, Richard William

Abstract

Many of the recently developed alternative econometric approaches to the construction and estimation of life-cycle consistent models using individual data can be viewed as alternative choices for conditioning variables that summarise past decisions and future anticipations. By ingenious choice of this conditioning variable and by exploitation of the duality relationships between the alternative specifications, many currently available microdata sets can be used for the estimation of life-cycle consistent models. We review alternative approaches and highlight their stochastic properties and implicit preference restrictions. Indeed, empirical specifications that are parameterised in a form of direct theoretical interest often can be shown to be unnecessarily restrictive, while dual representations may provide more flexible econometric models. These results indicate the particular advantages of different types of data in retrieving life-cycle consistent preference parameters and the most appropriate and flexible econometric approach for each type of data. We develop a methodology for relaxing the intertemporal separability assumption and consider the advantages and disadvantages of alternative approaches in this framework.

Suggested Citation

  • Blundell, Richard William, 1987. "Econometric Approaches to the Specification of Life-Cycle Labour Supply and Commodity Demand Behaviour," CEPR Discussion Papers 150, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:150
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    Citations

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    Cited by:

    1. Laisney, François & Pohlmeier, Winfried & Staat, Matthias, 1991. "Estimation of labour supply functions using panel data: a survey," ZEW Discussion Papers 91-05, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
    3. R. Blundell & M. Browning & C. Mehgir, 1989. "A Microeconomic Model of Intertemporal Substitution and Consumer Demand," Department of Economics Working Papers 1989-02, McMaster University.
    4. Felteau, Claude, 1989. "Commentaire sur le texte de Bernard Fortin," L'Actualité Economique, Société Canadienne de Science Economique, vol. 65(4), pages 508-514, décembre.
    5. Weber, Christian E., 2002. "Intertemporal non-separability and "rule of thumb" consumption," Journal of Monetary Economics, Elsevier, vol. 49(2), pages 293-308, March.
    6. Xiaodong Gong & Arthur van Soest, 2002. "Family Structure and Female Labor Supply in Mexico City," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 163-191.
    7. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1992. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," American Economic Review, American Economic Association, vol. 82(5), pages 1177-1198, December.
    8. Dameus, Alix & Tilley, Daniel S. & Brorsen, B. Wade, 2000. "Caribbean Demand Of U.S. And Rest-Of-The-World Starchy Food (Wheat, Rice, Corn, And Fresh Potatoes): A Restricted Source Differentiated Almost Ideal Demand System," A.E. Series 25232, Oklahoma State University, Department of Agricultural Economics.
    9. van Soest, A.H.O., 1990. "Essays on micro-econometric models of consumer demand and the labour market," Other publications TiSEM be045d62-a73d-4d7c-a591-f, Tilburg University, School of Economics and Management.

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