Preference interdependence and habit formation
It has already been stated in Chapter 2 that most likely utility functions will vary across households. For a good understanding of household labour supply it is important to identify systematic factors which cause this variation. We pay attention to two major causes of differences in utility functions across households: preference formation (in this chapter) and differences in household composition (in Chapter 2).
KeywordsReference Group Labour Supply Family Size Preference Formation Preference Interdependence
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