Why do some men father children outside of marriage without providing support? Why do some women have children outside of marriage when they receive little support from fathers? Why is this behavior more common among blacks than whites? We estimate a dynamic equilibrium model of marriage, employment, fertility, and child support decisions. We consider the extent to which low earnings, marriage ...

This note presents a detailed formal derivation of the equilibrium conditions of a variation of the deep habit model developed by Ravn, Schmitt-Grohé, and Uribe (2003). In the present note, the single-period utility function depends on the quasi ratio of current consumption to the stock of habit of each variety, whereas in the original deep habit model it depends on the quasi difference of thes...

Integrated assessment models lack a microeconomic foundation in modelling environmental damages to the economy. To overcome this, damage coefficients are incorporated in standard microeconomic models. Firms and consumers take both damages and prices as given. Demand, supply, profit and expenditure functions under damage coefficients are derived that allow easy implementation in applied economic...

We show that social interaction reduces the diversity of products purchased by consumers in two retail settings. First, we consider a field experiment conducted by Sweden’s monopoly alcohol retailer and find that moving purchases from behind the counter to self-service disproportionately increases the sales of difficult-to-pronounce products. Second, we use individual-level panel data from a pi...

In this paper we use a representative consumer model to analyse the equilibrium relation between the transitory deviations from the common trend among consumption, aggregate wealth, and labour income, cay, and focus on the implications for both stock returns and housing returns. The evidence based on data for 15 OECD countries shows that when agents expect future stock returns to be higher, the...

Pricing schemes that vary prices in response to demand shocks may antagonize consumers and reduce demand. At the same time, consumers may take advantage of the opportunities offered by price changes. Overall, the net impact of varying price on demand is ambiguous. We investigate the issue empirically, exploiting a unique dataset from a firm that has experimented with different pricing schemes. ...

This paper investigates how ownership changes affect the plant performance, focusing on the cotton spinning industry in early twentieth century Japan, where many plants experienced ownership changes. Through analyses of detailed plant-level data, it is revealed that, after ownership changes, plants tended to focus on low grade and low price products and, at the same time, total factor productiv...

Discrimination in the allocation of goods between boys and girls within households in Papua New Guinea is examined using Deaton’s (1989) outlay-equivalent ratio method. Adding a boy to the household reduces expenditure on adult goods by as much as would a nine-tenths reduction in total outlay per member, but girls have no effect on adult goods expenditure. The hypothesis of Haddad and Reardon (...

The share of household resources devoted to children is hard to identify, because consumption is measured at the household level, and goods can be shared. Using semiparametric restrictions on individual preferences within a collective model, we identify how total household resources are divided up among household members, by observing how each family member’s expenditures on a single private go...

The endowment effect, the tendency to value possessions more than non-possessions, is a well-known departure from rational choice and has been replicated in numerous settings. We investigate the universality of the endowment effect, its evolutionary significance, and its dependence on environmental factors. We experimentally test for the endowment effect in an isolated and evolutionarily releva...