Full price elasticities and the value of time: A Tribute to the Beckerian model of the allocation of time
This article adopts Becker's allocation of time framework to describe households' choices concerning both their monetary and time use expenditures in order to propose a new method to derive price elasticity at a micro level. Price and full income elasticities are estimated on a matching of a French Family Budget and a Time Use survey. The utility and home production functions are specified in order to allow the computation of the household's opportunity cost for time, which is shown to be smaller in average than the household's wage net of taxes. This estimate serves to value time dedicated to domestic activities and are used in the definition of full prices. The estimated price elasticities compare well with the estimates by other methods, such as Frisch's model based on independence of preferences assumptions or Hicks-Lewbel's method based on the aggregation of commodities. Finally, the model is applied to the computation of a welfare index, to the estimation of the household's labour supply and to a tentative explanation of the classic difference between cross-section and time-series estimates of income elasticities.
|Date of creation:||Feb 2014|
|Publication status:||Published in Documents de travail du Centre d'Economie de la Sorbonne 2014.14 - ISSN : 1955-611X. 2014|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00973418|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Deaton, A., 1988.
"Quality, Quantity, And Spatial Variation Of Price,"
30, World Bank - Living Standards Measurement.
- Nilton Cardoso & François Gardes, 1996. "Estimations de lois de consommation sur un pseudo-panel d'enquêtes de l'Insee ( 1979,1984,1989)," Économie et Prévision, Programme National Persée, vol. 126(5), pages 111-125.
- François Gardes & Christian Loisy, 1998. "La pauvreté selon les ménages : une évaluation subjective et indexée sur leur revenu," Économie et Statistique, Programme National Persée, vol. 308(1), pages 95-112.
- Bargain, Olivier & Peichl, Andreas, 2013.
"Steady-state labor supply elasticities: A survey,"
ZEW Discussion Papers
13-084, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Nicolas Ruiz & Alain Trannoy, 2008. "Le caractère régressif des taxes indirectes : les enseignements d'un modèle de microsimulation," Économie et Statistique, Programme National Persée, vol. 413(1), pages 21-46.
- Duncan, G.J. & Gardes, F. & Gaubert, P. & Starzec, C., 1998. "A Comparison of Consumption Models Estimated on American and Polish Panel and Pseudo-Panel Data," Papiers du Laboratoire de MicroÃ©conomie AppliquÃ©e 1998-09, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- François Gardes & Philip Merrigan, 2002. "“Individual Needs and Social Pressure : Evidence on the Easterlin Hypothesis on Canadian Repeated Cross-Sections”," Working Papers 2002-53, Centre de Recherche en Economie et Statistique.
- Deaton, Angus, 1974. "A Reconsideration of the Empirical Implications of Additive Preferences," Economic Journal, Royal Economic Society, vol. 84(334), pages 338-48, June.
- Marta Zieba, 2009. "Full-income and price elasticities of demand for German public theatre," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 33(2), pages 85-108, May.
When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:halshs-00973418. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.