Dealing with negative marginal utilities in the discrete choice modeling of labor supply
Authors
Philippe Liégeois, Nizamul Islam
Publication Date
Jan 2013
Summary
In discrete choice labor supply analysis, it is often reasonably expected that utility will increase with income. Yet, analyses based on discrete choice models sometimes mention that, when no restriction is imposed a priori in the optimization program, the monotonicity condition is not fully satisfied ex post. In order to overcome this limitation, some authors impose restrictions that may appear to be excessively severe. As an alternative, the present paper shows how to simply complete the standard maximum likelihood program in order to derive an optimum that may lead to positive marginal utilities only.
Volume and page numbers
Volume: 118 , p.16 -18
DOI
http://dx.doi.org/10.1016/j.econlet.2012.04.101
Publication type
Journal Article
Research area
Population changes and labour market dynamics
Links
http://serlib0.essex.ac.uk/record=b1614015~S5
Notes
Albert Sloman Library Periodicals *restricted to Univ. Essex registered users*
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